Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENVIRONMENT

Domestic Rating

Mr. Fitch: asked the Secretary of State for the Environment if he is yet able to announce when he expects to make a statement on his review of the future of domestic rates and possible alternative sources of local revenue.

Mr. David Atkinson: asked the Secretary of State for the Environment if he is yet able to announce when he expects to publish the White Paper on rate reform.

The Secretary of State for the Environment (Mr. Tom King): I shall announce our decisions on the review as soon as possible.

Mr. Fitch: Will the Secretary of State admit that the Government have not the faintest idea how to deal with the future of rates or, indeed, the whole local government financial structure? This is a very urgent matter. What plans for reform does he intend to introduce in the very near future to put local government on a better and more satisfactory financial basis?

Mr. King: I note the hon. Gentleman's feeling that changes need to be made. As I made clear, I cannot announce anything today. I do not accept the first half of his question, and we intend to announce our decisions on the review as soon as possible.

Mr. David Atkinson: Does my right hon. Friend agree that, although the last Conservative manifesto made it plain that rate reform could not be given a high priority, many thousands of ratepayers in the country voted Conservative in the belief and hope that we would abolish the domestic rating system? Will he therefore ensure that when the White Paper is published it will propose complete abolition, instead of only tinkering with the existing system?

Mr. King: In the interests of accuracy, although the question refers to a White Paper, I referred to our decisions, and the form that they might take is not yet decided. However, I assure my hon. Friend that I, of all people, am more than aware of the interest in this subject and of my responsibility to produce satisfactory answers.

Mr. Litherland: Does the Secretary of State realise that local government financing will now affect Manchester so much that some 20 community centres will

be closed and that that will affect the young, the elderly, the single parents, and the mums and toddlers club? Does he realise that what he is doing to the financing of those projects in Manchester will result in riots on the streets again? Will he, like his predecessor, come to Manchester with crocodile tears when the riots start?

Mr. King: I was proud to be able to announce two major new schemes for Manchester from this Dispatch Box last week, which I hope the hon. Gentleman appreciated. I hope, too, that instead of making speeches, which are now pretty obsolete, about the "bleeding cuts" that are necessary in various areas, he will look at the ways in which economies could be made in other services to ensure that essential provision is made. I know that the hon. Gentleman takes an interest in local government. There may be a question later on the Order Paper showing one or two areas in Manchester where that could be done.

Mr. Proctor: Is my right hon. Friend aware that the Conservative-controlled Essex county council is proposing to increase rates by 5 per cent., whereas Labour-controlled Basildon district council is proposing to increase rates by between 30 and 40 per cent? Is he further aware that the leader of the Labour group on the county council proposes next Tuesday to try to increase the Essex county rate by 2p in the pound more? Is not the real reform one that people can make for themselves in the May elections by electing Conservative administrations to county and district councils?

Mr. King: My hon. Friend will be aware that the pattern is now well established and well documented, on any statistical basis that one chooses, that Labour-controlled authorities have consistently gone for far higher rates increases, often with catastrophic results for employment and jobs in their areas. I note the stark contrast that my hon. Friend mentions between the Conservative-controlled Essex county council and. Labour-controlled Basildon.

Mr. Kaufman: Will the Secretary of State's statement, when it comes, honour the Prime Minister's personal and specific promise to abolish the domestic rating system?

Mr. King: I shall give exactly the same answer to the right hon. Gentleman. I have nothing to add to what I told him the last time he asked exactly the same question.

Water Workers (Pay)

Mr. Marlow: asked the Secretary of State for the Environment how water workers' pay has compared with that of local authority manual workers over the past 10 years.

Mr. King: A strict comparison is not possible because of the wide range and different natures of the jobs performed by the two groups.

Mr. Marlow: As there is no earthly reason why the pay of water workers should be compared with that of power workers, local authority manual workers, or even their probably harder working, less well paid and certainly less secure brothers in manufacturing industry, will my right hon. Friend undertake so to constrain the finances of the water authorities that yesterday's decision can be paid for only through productivity increases?

Mr. King: My hon. Friend is correct. He will know that the chairman made no finding in support of


comparability with other groups of workers in his statement yesterday. He will also be aware that the vast majority of authorities have now established their water rates for the coming year. Therefore, the only way in which any increases can be paid for is out of productivity, greater efficiency and cost economies.

Mr. Arthur Lewis: If the Minister is to make the comparisons that his hon. Friend the Member for Northampton, North (Mr. Marlow) wants, will he also bear in mind that there are about 800 men and women receiving 10 and 12 times as much in tax free expenses in another place as are hon. Members here?

Mr. King: That goes a little wider than the original question and, in defence of my hon. Friend the Member for Northampton, North (Mr. Marlow), I think that the purpose of his question was to make clear that there is no such thing as comparability in this sphere.

Several Hon. Members: rose—

Mr. Speaker: Order. There will be a statement at the end of Question Time on the broader issues of the water dispute.

Planning Applications

Mr. Knox: asked the Secretary of State for the Environment whether he is satisfied with the speed with which planning applications are being dealt with.

The Under-Secretary of State for the Environment (Mr. Giles Shaw): There has been a welcome improvement. The latest statistics, which are for April to June last year, show 70 per cent. of planning applications being determined in eight weeks, as against 62 per cent. a year earlier. I hope we can improve further on this.

Mr. Knox: Is my hon. Friend aware that in the second quarter of last year, the period to which he referred, 23 per cent. of the planning applications to the Peak district national park joint planning board took more than 13 weeks to determine, compared with 5 per cent. of the applications to the Staffordshire Moorlands district council and none of the applications to the Newcastle borough council, the other two local authorities in my constituency? Is my hon. Friend satisfied with the performance of the Peak district national park joint planning board and, if not, can he do anything about it?

Mr. Shaw: No, I cannot be satisfied with the performance of the Peak district national park joint planning board, because its performance, although it has improved in recent quarters, is substantially below the average of other national parks. I recognise that many planning applications in areas of outstanding natural beauty take a considerable time to be dealt with, but some further improvement can certainly be made.

Mr. Stephen Ross: Although I recognise that there has been an improvement in this area, does the Minister agree that time is money, jobs and investment? Will he please encourage planning committees, so that they may reach decisions more quickly to meet more frequently than once a month when they have to deal with big applications for which people are paying sizeable sums?

Mr. Shaw: I entirely accept that it is vital that local authorities recognise the importance of speedy decisions, and I am happy to say that most now do.

Mr. Chapman: Although I welcome the more speedy processing of planning applications, is that because local planning authorities' procedures have been improved, or simply because fewer applications are being made?

Mr. Shaw: There has been a decline in the number of applications, but I should like to think that some improvements have also been made. A considerable effort has been made by my Department and, I might even say, by myself, to speed up such matters.

Vacant Land Registers

Sir William Elliott: asked the Secretary of State for the Environment if he will now seek to require unused and vacant public land under one acre to be included in the vacant land registers.

Mr. Giles Shaw: I have no plans to do so at the moment. I prefer to concentrate for the time being on promoting the more effective use or disposal of land already registered, but I shall keep this question under review.

Sir William Elliott: Is my hon. Friend aware that the land already registered as unused and derelict totals no less than 94,000 acres, much of which is in the hands of state-run industries and local authorities? Will he do his best to release that land to create employment and also to add to local authorities' rate revenue?

Mr. Shaw: I entirely accept my hon. Friend's point. The objective of the land register scheme is to provide information about available sites, some of which have clear potential for development.

Dr. David Clark: The House will be pleased to hear the Minister's answer today, but has he seen the survey that was conducted by the House Builders Federation, which showed that the 26,000 acres listed on the land registers included roadside verges and a six-mile rail embankment, and that only 11 per cent. of the land on the register was suitable for house building? Therefore, will he have no truck with the idea of bringing in the smaller areas?

Mr. Shaw: The hon. Gentleman's point should be fully and correctly answered. Although 11 per cent. of the land is available for house building, a large proportion of registered land will not be suitable for development. That has always been the case. However, it must be important that we are trying to bring every development site into productive use as soon as possible. Smaller sites will be too costly to introduce at this time.

Mr. Hordern: As the Government already have the power to direct local authorities and the nationalised industries to dispose of this land, why is that power not being used and why is the land not being sold so that the construction industry can be put to work?

Mr. Shaw: I am prepared to take action where circumstances warrant it. In recent weeks we have written to the owners of about 78 sites inviting their comment as to why they have not disposed of the sites in question. I must remind my hon. Friend that the present state of the construction industry is such that not all sites available for development are being taken up even now.

Rate Support Grant

Mr. Alton: asked the Secretary of State for the Environment what estimates for the rate of inflation were used in calculating the recent rate support grant levels.

Mr. King: Like all other public expenditure programmes, the local authority expenditure provisions for 1983–84 were planned in cash. They reflect the Government's view of what the country can afford.

Mr. Alton: As the water workers' award may well have a spin-off effect for other public sector employees, and as the rate of inflation could well increase, how will the Secretary of State help local authorities which find that they do not have sufficient resources at the end of this year to maintain existing services?

Mr. King: It is becoming clear that local authorities have been considerably advantaged in the present year by the fall in inflation and interest rates. Despite an admittedly tough rate support grant settlement that reduced the rate support grant by 3 per cent., the overwhelming majority of responsible authorities are now making very low rate increases and I expect that to be maintained. I do not want to follow the hon. Gentleman in looking at every possible problem that can be dredged up.

Mr. Kenneth Carlisle: Will my right hon. Friend confirm that the rapid fall in the rate of inflation has enabled many councils to impose low rate increases in the coming year, which is a further proof of the success that can be achieved if we continue our fight against inflation?

Mr. King: I certainly endorse that. However, there will be some unfortunate exceptions to the low rate increases. One notices the sorts of projects that the Greater London Council has for its expenditure. It is no wonder that it is threatening Londoners with yet another substantial rate increase.

Mr. Marks: Is it the Government's view that, compared with industry, domestic ratepayers do not pay a high enough proportion of local government expenditure?

Mr. King: We have no proposals to change the balance between the domestic and industrial ratepayer, as I made clear in the original discussions and in the Green Paper.

Mr. Oakes: Will the Secretary of State comment on the reports of his speech to the Conservative party's local government conference last weekend, when he said that he was about to scrap targets and penalties?

Mr. King: I told the local authorities and delegates at that conference that I would very much prefer to see a system in which targets were not necessary. The challenge is with local authorities. Targets were introduced to try to obtain a better achievement on Government expenditure targets overall and if we were able to secure that I would be delighted to see whether it was possible to get rid of targets.

Vacant and Derelict Land

Mr. Hawksley: asked the Secretary of State for the Environment, of the 61,000 acres of vacant and derelict land in local authority ownership and included in the vacant land registers at 1 July 1982, how many acres have now been brought into use by the owners.

Mr. Giles Shaw: The latest returns are still being analysed, but it is provisionally estimated that by 1 January this year some 3,800 acres of local authority land had been released from the registers, of which over a third had been brought into use by the owners since registers were published.

Mr. Hawksley: As the Telford area has a total of 2,175 acres on the register, will the Minister consider trying to persuade the development corporation to de-designate and sell any surplus land, although I appreciate that new towns have an above average amount of spare land?

Mr. Shaw: I would certainly be willing to take up my hon. Friend's suggestion, but it is important that those who seek to use land that is on that register should make the application. If it is not being effectively dealt with, I should very much like to know about it, but the local demand must exist.

Mr. Steen: Will my hon. Friend now do something more than merely say that he will persuade nationalised industries and local authorities to do something in the fullness of time? Is he aware that 3 per cent. of all land in Britain is now vacant and that 1·5 million acres are wasting? Bearing in mind that we import more than 50 per cent. of our food, is it not time that we auctioned off some of the derelict public land which is still in ownership and is unused?

Mr. Shaw: I accept my hon. Friend's conclusion that we must apply every possible pressure for the development and disposal of land. With regard to the public register, however, we are dealing with what certain categories of owner possess, for which there is no plan beyond a two-year date. I plead with my hon. Friend to recognise that we will seek to secure disposal, and we could be substantially aided and abetted in this when circumstances improve locally, which would increase the demand for such development to take place.

Mr. Edwin Wainwright: Will the Minister take into account the fact that often when local authorities sell land, land sharks take over and make a tremendous profit out of it? Will he ensure at all times that when a local authority sells its land it does so for the benefit of the community as a whole and not for the benefit of a few individuals?

Mr. Shaw: It will be enormously to the benefit of the community if land for which it has no planned development is allowed to be sold and developed, thus producing a greater rateable value for the local authority.

Local Authorities (Privatisation)

Mr. Marks: asked the Secretary of State for the Environment what progress has been made in privatisation within local authorities.

Mr. King: A growing number of authorities are testing the efficiency of their services by putting them to competitive tender, and an increasing number are finding that significant savings can be made by awarding contracts to specialist outside firms.

Mr. Marks: Is it the Government's intention to put pressure on local authorities to sell off or put out to private enterprise such things as sports centres, allotments, playing fields, swimming pools and even cemeteries?

Mr. King: I am anxious that every local authority should test every service to ensure that it is being provided


in the most cost-effective way. As the hon. Gentleman decided to ask this question—perhaps his hon. Friend the Member for Manchester, Central (Mr. Litherland) will be interested in this—I checked on Manchester's refuse disposal service. Manchester now has the most expensive refuse collection service per capita, outside any London borough, in the country. On a rough estimate, it now appears on the new proposal that Manchester's refuse collection cost is twice that of Birmingham, and that if Manchester could make an equivalent saving to Birmingham, £2·5 million would be available which might go to deal with some of the difficult problems with which the hon. Gentleman has to reckon.

Sir Anthony Grant: I welcome the good sense of the increasing number of local authorities which, in the interests of their ratepayers, are using private enterprise for there services, but is my right hon. Friend aware that we are still a long way behind many other countries in this respect? Will he follow the excellent example of his right hon. Friend the Secretary of State for Social Services and issue a powerful circular to local authorities along the lines of the one issued by his right hon. Friend in the case of the Health Service?

Mr. King: I am upset by that question. I thought that we were well ahead of my right hon. Friend the Secretary of State for Social Services. We have been advocating and encouraging this approach, and my noble Friend Lord Bellwin, the Minister for Local Government, has also been extremely active in this area. I believe that no council, no councillor and no council official can honestly claim to be properly discharging their duties unless they have established and checked whether services are being provided in the most cost-effective way. The only way to do that is to put them out to tender.

Mr. Eastham: The Secretary of State continues to make snide remarks about refuse disposal in the city of Manchester. Does it ever dawn on him that refuse disposal sometimes costs some cities hundreds of thousands of pounds because they have no tipping space, which means that tons and tons of refuse have to be transported out of the city? What about that aspect?

Mr. King: That is absolutely correct. That is why I was referring not to refuse disposal but to refuse collection. If the hon. Gentleman is dismissing the fact that it costs twice as much to collect Manchester's refuse as it does to collect Birmingham's, that is the most classic example of a closed mind that the House can ever have seen.

Dr. Mawhinney: Does my right hon. Friend agree that the pressure to privatise local authority services is motivated by a desire to give the ratepayer the best value for money rather than being simply an ideological exercise?

Mr. King: If we are to see services of the type that the House would wish to see for the handicapped, for the elderly and for the disadvantaged in our society, it is essential that main services are provided in the most cost-effective way.

Sheltered Housing

Mr. Foulkes: asked the Secretary of State for the Environment how many sheltered housing starts he expects in 1983.

The Under-Secretary of State for the Environment (Sir George Young): My Department makes no such forecasts. It is for individual local authorities and housing associations to decide, in the light of local needs, what provision to make for sheltered housing from the resources available to them.

Mr. Foulkes: Has the Minister seen the Age Concern, Scotland figures, which show that the shortfall of sheltered housing in Scotland is 24,000? Is he aware that, if one extrapolates that figure for the whole of the United Kingdom, there must be about 250,000 old people who need sheltered housing but do not have it? Will the Minister therefore give some encouragement to local authorities to install dispersed community alarm systems so that, at the very least, old people at risk will have some immediate contact in times of emergency?

Sir George Young: No, I have not seen those figures, because I have no responsibility for housing in Scotland, but I am happy to say that sheltered units started in England in 1982 were 40 per cent. up on 1981. The hon. Gentleman is quite right. There is a wide variety of alternative provision, such as that which he mentioned, which enables many elderly people to stay in their own homes, which is what many of them wish.

Mr. Andrew F. Bennett: In spite of the Minister's claim that sheltered unit starts are 40 per cent. up on the previous year, does he accept that the number is appallingly low and that it is not growing even at a rate to keep pace with the number of people aged over 75? Does he agree that what we need is a major improvement in the amount of sheltered housing so that people can have the type of housing that they need, thus vacating family houses so that others can use them?

Sir George Young: The decline in starts began in 1977. I am happy to say that we have now reversed that slide. We are now on a steady increase. The important point is that one wants to provide a variety of choice and that sheltered units provided by local authorities are not the only answer. Substantial progress can be made through home improvement grants and through loans. I am delighted that the private building sector is taking a growing interest in making provision for elderly people and that there is an interest in the leasehold scheme for the elderly.

Sports Council

Mr. Proctor: asked the Secretary of State for the Environment what public funds were given to the Sports Council in 1982–83 and 1981–82; and what is his estimate of the sums available in 1983–84.

The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): In 1981–82 the Sports Council grant-in-aid was £21,032,000. For the current financial year it is £28,002,000. That figure includes £1 million for Merseyside and two supplementary grants totalling £4·25 million.
The Sports Council's grant-in-aid for 1983–84, subject to parliamentary approval, will be £27,030,000, which includes a further £1 million for Merseyside.

Mr. Proctor: Does my hon. Friend agree that it is rather incongruous, when, rightly, we put a microscope on all areas of public expenditure, that the Sports Council


deems it right to give £90,000 by way of grant to the David Lloyd regional tennis centre, which is no doubt a profitable and flourishing tennis club? Does my hon. Friend think it right to have a thorough review of the Sports Council's activity and the accountability of the Sports Council to the Minister for its expenditure of these massive sums of public money?

Mr. Macfarlane: The Sports Council is an independent body and is obliged to refer to my Department only when it is anticipating providing capital of more than £200,000. We look closely at these figures, but the Sports Council is an independent body. I do not accept that this centre will be the success that my hon. Friend thinks it will be and, in that a large amount of private money is invested in it, I can only hope that it will do much to restore tennis in this country.

Mr. Pavitt: Has the Minister noted the excellent work of the Sports Council in contributing to racial harmony and integration? Has he noticed that, as a result of the work of the Sports Council, Great Britain is receiving a large amount of kudos from events all over the world where Caribbean ethnics and other British citizens are able to gain medals in sports and athletics on behalf of Great Britain?

Mr. Macfarlane: I pay tribute to the success of all our athletes and sportsmen and women. It shows that there is great integration in our cities and counties. I can only hope that it will continue.

Mr. John Carlisle: Despite the tone of the question by my hon. Friend the Member for Basildon (Mr. Proctor), will my hon. Friend the Minister send the congratulations of the House to Mr. Dick Jeeps and his colleagues on the tremendous amount of work that they have been doing for the unemployed in the inner cities? Will he tell the House that large sums of money from the urban aid programme have gone towards helping the unemployed and providing facilities for them?

Mr. Macfarlane: I willingly do that. I am always anxious to save my Department's money, so I would sooner tell Mr. Jeeps that than send him a telegram. I pay tribute to the work that has been and is being done, which is most important. The first facility for the pound-for-pound scheme on Merseyside opens in Toxteth tomorrow. We have endorsed that with further pound-for-pound schemes in Bristol and the north-east, the details of which I shall announce in due course. The urban aid programme, together with the inner city partnership money and derelict land grant mean that in the last full financial year the better part of £60 million was dispersed towards the inner cities.

Mr. Graham: What part did the Minister play in the enforced resignation of the director general of the Sports Council?

Mr. Macfarlane: I am responsible only for the appointment of the chairman, vice chairman and members of the Sports Council. The appointment and rejection of any persons in the Sports Council is a matter for the chairman, the vice chairman and the council, not for my Department.

Civil Engineering Industry

Mr. Litherland: asked the Secretary of State for the Environment if he will arrange to meet trade union representatives to discuss the problems of the civil engineering industry.

The Minister for Housing and Construction (Mr. John Stanley): Department of the Environment Ministers regularly meet representatives of the civil engineering trade unions at meetings with the group of eight and at the economic development committees for building and civil engineering.

Mr. Litherland: Does the Minister realise that the financing of the infrastructure of this country is vital and that this vital industry is receiving, in real terms, decreasing finance? Does the Minister agree that he should not only listen to the unions but should take action that will get us out of this economic mess?

Mr. Stanley: The hon. Gentleman will be pleased to see that the figures for 1982, which were announced today, show that there was a 4 per cent. increase in real terms in new orders for construction last year. That shows that there is some revival of the construction side of the economy. I draw the hon. Gentleman's attention to the public expenditure White Paper, which shows that we are making a public expenditure allocation for construction programmes involving a 10 per cent. increase next year on this year's outturn. That represents an increase in real terms.

Mr. Latham: I welcome the figures that my hon. Friend has just given, because civil engineering is important to our infrastructure. Will he ensure that there is no underspending in Government Departments on civil engineering programmes?

Mr. Stanley: It is the wish of all my right hon. Friends that we try to make full use of the available allocations. That is very much the wish of, for example, my right hon. Friend the Secretary of Stare for Transport and others of my right hon. Friends who have direct responsibility for the capital investment programme. They are very much aware of that.

Inner City Areas (Housing)

Mr. Cohen: asked the Secretary of State for the Environment if he has any plans to assist housing development in the inner city areas, such as Leeds; and if he will make a statement.

Sir George Young: The Government are actively encouraging local authorities to work with private house builders to meet the housing needs of their areas, in particular by selling land for development. Current initiatives include new building under licence from the local authority, improvement for sale and homesteading and enveloping. Local authorities and housing associa-tions are also assisting low-income purchasers to take advantage of those opportunities on shared ownership terms.

Mr. Cohen: Will the Minister say whether, following the statement that was made on Tuesday of last week, he has reviewed the views expressed then and decide which authorities will benefit from the statement? Is he aware that areas such as Leeds feel that they are Cinderellas?


Over 500,000 people are still neglected. Does the Minister recognise that there is a waiting list of 22,000 for corporation or local authority housing in the city and that we are faced with problems in education, housing, leisure services and so on? Is the Minister prepared to make a statement to the effect that an additional list will be issued containing the authorities not included in the previous list.

Sir George Young: The hon. Gentleman is referring to the statement that my right hon. Friend made last Tuesday on the urban development grant. I am happy to say that there will be further announcements on the urban development grant. I am aware that Leeds hopes to use an urban development grant to get the city centre housing development scheme off the ground, in association with a private builder. Within the Department we are currently considering the Leeds application. On the housing side, Leeds has recently been given an additional allocation of £9 million for expenditure between now and the end of the year. I am sure that that will make a significant impact on the problems mentioned by the hon. Gentleman.

Mr. Squire: Does my hon. Friend agree that one of the problems in innner urban areas is vacant property and difficult-to-let estates? Does he agree also that the priority estates project initiated by his Department has made considerable strides towards providing housing in areas that were previously rejected?

Sir George Young: My hon. Friend is absolutely right. I am delighted that under the urban programme many local authorities are putting forward schemes that will draw on some of the many ideas in the priority estates project booklet to which my hon. Friend referred.

Mr. Steen: Does my hon. Friend agree that one of the best ways to help housing development in the inner cities is to allow those on council housing lists to put council flats and houses that are in disrepair into repair and to move in? Is he aware that the extended lists of people who want to move into council houses are caused by local authorities refusing to let people move in and do their own repairs?

Sir George Young: My hon. Friend is absolutely right. I am sure that local authorities which are sitting on empty properties that are earning no rents and no rates will listen to what he has said and encourage any imaginative suggestions for putting those properties to good use.

Private Tenants (Right to Buy)

Mr. Winnick: asked the Secretary of State for the Environment if he will introduce legislation to permit as of right private tenants to purchase the accommodation they live in.

Mr. Stanley: I refer the hon. Member to the reply given to him by my right hon. Friend the Prime Minister on 15 February 1982.

Mr. Winnick: Why should the one group of tenants most at risk from unscrupulous landlords and property companies be denied the right to buy as of right? Is the explanation—perhaps the Minister will be honest enough to admit it—that Tory Ministers do not consider it part of their job to offend substantial property interests, including those who sit on Conservative Benches and in another place?

Mr. Stanley: We have made it clear to the hon. Gentleman on many occasions that we believe that sales in the private sector should be by a voluntary process. The Government do not believe that a Government have the right to require the disposal of houses that have been purchased by private individuals with their own assets. It is strange that the hon. Gentleman has raised that issue when he has spent an inordinate amount of time in Standing Committee F denying and arguing against the right to buy in the public sector.

Sir Albert Costain: Does my hon. Friend realise that a number of landlords are offering their tenants the opportunity to buy on exactly the same terms as council tenants? My hon. Friend must appreciate that there are some good landlords and that they are not all demons and devils, as the hon. Gentleman implies.

Mr. Stanley: My hon. Friend, as always, is entirely right. Our estimate is that over the past decade between 150,000 and 200,000 sitting tenants in the private sector have been able to negotiate the purchase of their homes from their landlords.

Mr. R. C. Mitchell: If the Conservative party really believes in a property-owning democracy, why on earth do not the Government extend this principle by accepting the excellent suggestion made by the hon. Member for Walsall, North (Mr. Winnick)?

Mr. Stanley: That is an interesting observation. I am sure that it will be noted outside that the alliance has no regard to private assets in private property.

Mr. Cryer: Is it not true that the Conservative party has every respect for private assets, which is why it will not advance to these tenants rights which it regards as very important for the public sector? Is it not true that the Tory party is bent on destroying the public sector and hiving off important public assets, which will not add a single house to the public sector and will inevitably lengthen housing waiting lists in the public sector?

Mr. Stanley: We have no wish to destroy the public sector, as the hon. Gentleman suggests. We have an expanding house building programme and an expanding provision of public expenditure in the public sector. We believe that the aspirations of the overwhelming majority of people to buy their homes should be fulfilled wherever possible.

Mr. Durant: Does my hon. Friend agree that many councils are extremely bad landlords and that is why the Government had to introduce a tenants' charter?

Mr. Stanley: I am grateful to my hon. Friend for making that point. He is entirely right. As a result of the Government's actions through the Housing Act 1980 and the provisions that we have tabled to the present legislation, we shall have brought about the most important single extension of the legal rights of all tenants in the public sector.

Financial Institutions Group

Sir Anthony Grant: asked the Secretary of State for the Environment what has been the practical effect of the work of the financial institutions group established by his Department; how many members there are; and what has been the total cost.

Mr. King: The financial institutions group has been a most successful experiment in combining the expertise of the public and private sectors. Twenty six managers from major private sector institutions have worked with the Government for the past year on new approaches to urban regeneration. The urban development grant and inner city enterprises are two ideas that have already been adopted. The institutions met most salary costs and expenses—about £1 million. The cost to the public sector—approximately £350,000—was mainly for Civil Service support.

Sir Anthony Grant: I welcome any initiative that my right hon. Friend takes to encourage private enterprise to operate where there is urban decay. Does he agree that the financial institutions group is one of many hundreds of such bodies throughout the country and that what it has achieved in terms of removing urban decay is obscure? Would there be some merit in having a national directory of all these schemes that includes an evaluation of what they are doing to achieve my right hon. Friend's admirable aim?

Mr. King: The financial institutions group has worked with the Government to investigate ways in which the institutions and private sector funding can play a larger role in contributing to some of those programmes. Much work has already been done, but I am keen to give the maximum publicity to the work that such bodies have done. I shall see how that can be carried forward.

Mr. Squire: I congratulate my right hon. Friend on the flexibility that the Department shows in tackling the problems of inner-city areas. Does he agree that that is in contrast to the attitude of several Opposition Members who still see the problem as being simply one of spending ever more state money by local authorities?

Mr. King: That is right. I referred briefly to urban development grant. The first tranche that I announced was £10 million, which was in support of £40 million of private investment. It is interesting to note that an additional £800 million of investment, which is strongly geared to private sector investment in this regard, is under consideration in my Department. There is a charming note which describes that, which I see included in my briefing. It says:
Unspecific optimism is the order of the day.

Gleneagles Agreement

Mr. John Carlisle: asked the Secretary of State for the Environment if he will seek to convene a conference of Commonwealth Ministers of Sport to discuss the effect on sport in member countries of differing interpretations of the Gleneagles agreement.

Mr. Macfarlane: No, Sir.

Mr. Carlisle: In view of the vindictive action of the Jamaican Government, who have cancelled the English women's cricket team tour, and in view of the Australian Government's banning of English nationals simply because both parties have played some sport in South Africa, will my hon. Friend consider such a conference and recommend to the Commonwealth Prime Ministers that the Gleneagles agreement is now being used for purely political purposes and should therefore be abandoned?

Mr. Macfarlane: It is the Commonwealth declaration on apartheid in sport, not the Gleneagles agreement.

Moreover, it is not an agreement. The 1977 declaration was agreed by the Commonwealth Heads of Government. Only they can amend it. I cannot. I should like to make it clear that the Government have always interpreted that declaration as enabling Governments to have the discretion to fulfil their own obligations according to their own laws. We have made it quite clear that we do not recognise the United Nations apartheid committee and its blacklist.

Mr. Graham: Will the Minister bear in mind that the Gleneagles agreement is held to be satisfactory by all except the South African lobby and that, if it is honoured, there will be no British representation at the Olympic Games in 1984, the Commonwealth Games in 1986, the world cup in 1986 and the European football championships in 1984? If we are to continue to oppose racism in sport, will the Minister remember that no authoritative group or individual has yet claimed that sport in South Africa is not fully controlled by apartheid laws?

Mr. Macfarlane: I acknowledge the hon. Gentleman's latter point. Nevertheless, the meeting of Commonwealth Heads of Government in Melbourne in September 1981 agreed to uphold the principles of the Gleneagles agreement.

Empty Houses (Private Sector)

Mr. Greville Janner: asked the Secretary of State for the Environment what estimate he has of the percentage of houses in the private sector that are empty and treated as voids; and what have been the corresponding figures for each of the past five years for which records are available.

Sir George Young: Local authorities' 1982 housing investment programme returns provide the latest available estimate that about 4·3 per cent. of private dwellings in England were vacant in April 1982 for all reasons. Authorities' estimates are not generally based on detailed surveys and their accuracy will vary, the private sector figures being less firmly based than the corresponding ones for the public sector.
The corresponding percentages for the four preceding years were 4 per cent. in 1978 and 1979, and 4·1 per cent. in 1980 and 1981.

Mr. Janner: Is not the truth about housing in the private sector that the shortage is not one of land, as the Government proclaim, but of money to enable people either to buy or rent houses in that sector? Does he agree that the Government should now recognise the need to put money into the public sector, where more and more disadvantaged people are having more and more trouble in having the decent roof over their heads to which they are entitled?

Sir George Young: There has been a tremendous underspend by local authorities this year. They have not been able to spend the resources that the Government have made available to them. Next year those resources will be about 15 per cent. higher than they were this year. With regard to the private sector, I am not aware of a shortage of resources in building societies for people who want to buy.

Mr. Hill: Does my hon. Friend agree that one of the reasons why so many private sector houses are left vacant


is the abysmally low rents under the fair rents system, the two-year phasing for rents and the fact that as soon as a private house is rented the occupant demands the maximum maintenance and repairs? Does he agree that it is, therefore, almost impossible for the private landlord to let a house that has been void for some years?

Sir George Young: The Housing Act 1980 addressed itself to the balance between landlord and tenant and recognised that the balance had shifted too far towards the tenant. With regard to property remaining empty, we have introduced shorthold. I deplore the irresponsible claim of the Opposition that they will repeal shorthold should they be returned to power.

Mr. Stephen Ross: Is the Minister aware that some of the houses that are empty are in conservation areas and are not therefore rateable by the local authority? Does he agree that that is one way in which those properties could be brought back into occupation? Is he further aware that I know of two such properties in my home town?

Sir George Young: I shall examine that problem. However, I should be surprised if that is the only reason why those properties are being kept empty and whether it would have more than a marginal impact if they were rated.

Homeless Persons

Mr. Eastham: asked the Secretary of State for the Environment if he will make additional resources available to local authorities in areas which are the centres of large conurbations to assist them with the provision of hostels for homeless persons.

Sir George Young: The need for investment in hostel and move-on accommodation was one of the factors that was taken into account in determining housing investment programme allocations for 1983–84. In addition, through its hostels initiative, the Government have since 1981 made substantial and increasing sums for hostels available to housing associations through the Housing Corporation.

Mr. Eastham: Is the Department placing enough importance on the problem of the single homeless as it affects the core cities? Is the Minister aware of the high financial consequences that affect their revenue account and which will be subject to penalty? Does he realise that they must face the problems of social behaviour of some of the people who need urgent assistance? Is it not time that they were placed under the umbrella of one Department instead of being between the Department of the Environment and the DHSS?

Sir George Young: Discussions about topping-up grants are continuing with the DHSS. We hope to come to a conclusion quite soon. With regard to the hon. Gentleman's general point about accommodation for the single homeless, the Housing Corporation allocation for hostel schemes was £12 million in 1981–82, whereas next year it will be £32 million. That gives some idea of the priority that we give to the subject.

Mr. Pavitt: Is the Minister aware of the importance of the question of my hon. Friend the Member for Manchester, Blackley (Mr. Eastham) about centres of large conurbations? Does he know that in Brent this week 430 homeless people are being provided with bed and breakfast accommodation at a cost of more than £30,000

per week? Will he reconsider his decision of some months ago and enable Brent council to buy hostel accommodation outside the borough boundaries, which would be much cheaper for our ratepayers?

Sir George Young: I met the director of housing of Brent council at a recent conference and asked him to write to me about the specific problem to which the hon. Gentleman referred. When I receive his letter I shall see what I can do to help.

Shared Ownership Housing Schemes

Mr. Jessel: asked the Secretary of State for the Environment if he will make a statement on the progress of shared ownership housing schemes.

Mr. Stanley: The use of shared ownership by first-time buyers in particular is continuing to accelerate and is likely to do so markedly this year as a result of the do-it-yourself shared ownership scheme that I announced in answer to my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) on 24 January, and as a result of the right-to-buy on a shared ownership basis proposed in the Housing and Building Control Bill.

Mr. Jessel: Will my hon. Friend see what can be done to give a fair wind to the excellent shared ownership scheme of the Richmond Upon Thames Churches Housing Trust Ltd. at London road, Twickenham?

Mr. Stanley: I assume that the scheme is in the process of gestation. I shall write to my hon. Friend when I discover the state of play.

Mr. Dubs: Is the Minister aware that many private tenants, especially those with bad landlords, would wish to take part in shared ownership schemes if only they had the opportunity? Will he reconsider his answer to my hon. Friend the Member for Walsall, North (Mr. Winnick) about the right of private tenants to buy when the landlord is selling the property? Will he consider giving private tenants the right to buy in those conditions?

Mr. Stanley: As to the availability of shared ownership, I refer the hon. Gentleman to the new scheme that I announced a few weeks ago. We have now created a shared ownership opportunity for all tenants—including those still living with their parents, or single people—throughout the country. In a written answer that I shall give to the hon. Member for Woolwich, East (Mr. Cartwright) later today I shall set out the housing associations that will cover each area in England under the do-it-yourself shared ownership scheme. That will provide the opportunity of shared ownership for all who wish to take advantage of it, especially for the first 3,000 sales for which we have made financial provision. The scheme will be helpful.

Property Services Agency

Mr. Conlon: asked the Secretary of State for the Environment what further consideration has been given to the future structure of the Property Services Agency; and if he will make a statement.

Sir George Young: My right hon. Friend has now received from the chief executive of the Property Services Agency proposals for restructuring the agency and for changes in its management and operating methods. Before


taking any decision on those proposals, Ministers are consulting the departmental trade union side and other Government Departments affected.

Mr. Conlan: I am grateful to the Minister for his reply. However, will he give an unequivocal undertaking that the Newcastle office of the Property Services Agency will be maintained because of its crucial role in defence? Will he also undertake that there will be no privatisation of the work carried out in that office?

Sir George Young: The proposals are at an early stage and it is impossible to say which offices might be closed. The rather alarmist proposals circulated by the trade unions have given rise to needless anxiety.

Mr. Robert Atkins: In the review to which my hon. Friend refers, does he expect consideration to be given to the arrangements that obtain between the PSA and various military organisations in terms of the direct line of management for repairs and other jobs carried out by the PSA on bases and in RAF camps?

Sir George Young: The proposals deal with that relationship, and there are suggestions to co-locate the PSA departments with Ministry of Defence departments rather than splitting the responsibilities of the PSA among all the Government Departments that it serves.

Mr. Marks: Is the Minister satisfied that, where PSA functions have already been handed over to private enterprise, the private firms are carrying out the same training of apprentices and professional people as the PSA did? Will he monitor this matter?

Sir George Young: The proposals are not primarily about privatisation, but about the functions and operating methods of the PSA, to see whether we can make it more efficient and improve its services.

Sir Anthony Grant: In the reorganised PSA, will my hon. Friend satisfy himself that there is absolute fairness and openness in the way in which the PSA appoints architects and private contractors for some work?

Sir George Young: Yes. That is our policy. If my hon. Friend knows of a problem, perhaps he would be good enough to write to me.

Vacant and Underused Land

Mr. Heddle: asked the Secretary of State for the Environment what steps he is taking to ensure that local authorities and other public bodies holding vacant and underused land dispose of land for private housebuilding.

Mr. Giles Shaw: The Department has regular contact with the House Builders Federation, which has drawn attention to registered sites that appear to it to be suitable for housing. On the basis of this information and the Department's initial appraisal, it was decided to send formal letters to 38 landowner bodies asking to know their intentions in regard to a total of 78 sites in their ownership.

Mr. Heddle: Does my hon. Friend agree that the problem of council house waiting lists could best be solved by encouraging the private sector to build homes for sale, using the half-and-half scheme and the other initiatives announced by his Department? Will he ensure that all local authorities and public sector landholders dispose of their land to the private sector as quickly as possible?

Mr. Shaw: We intend to encourage them so to do. Various actions are in train to achieve that objective.

Mr. Newens: Does the hon. Gentleman recognise that many local authorities need land for building council houses, and that many people have no hope of getting a home unless they can get a council house tenancy? In those circumstances, what will he do to prevent property speculators, who are anxious to make the most of sales to the private sector, from taking over all available land from local authorities which need it for other purposes?

Mr. Shaw: I remind the hon. Gentleman that the land registers produce a list of sites for which there is no planned local authority development. If they had such plans, the land would not appear on the land register list.

Mr. Durant: Will my hon. Friend do all that he can to encourage local authorities to look within their boundaries for vacant land to develop both private and public sector housing, rather than constantly looking outward to green field sites?

Mr. Shaw: I entirely agree. The land register system is one such proposal.

Greater London Council

Mr. Wellbeloved: asked the Secretary of State for the Environment what representations he has received concerning the abolition of the Greater London council.

Mr. King: In the past year I have received more than 50 representations from individuals and organisations concerning the abolition of the GLC. All but three have been in favour of abolition.

Mr. Wellbeloved: Will the Secretary of State bear in mind that the case for abolition does not rest only on the lunatic antics of the Labour-controlled GLC and its desire to dish out lavish subsidies to organisations ranging from those who support gay tights to supporters of IRA bombers? Is he aware that the real case for abolition rests on the simple fact that no service provided by the GLC could not be undertaken by the 32 London boroughs, individually or by co-operation?

Mr. King: I understand the hon. Gentleman's point, although he will accept that it is sometimes difficult to find out what the GLC is doing, so widespread and lunatic are some of the schemes at present espoused. The result of that is that this year GLC expenditure looks as though will be more than double what it was when the Labour administration there came to power.

Mr. Mark Carlisle: Does my right hon. Friend recognise that any consideration of the abolition of the GLC will bring into question the future of education in London? Does he agree that, whatever solution is required, a return to the boroughs would not be suitable?

Mr. King: In considering any such proposals, education would be affected. At this stage I shall simply note my right hon. and learned Friend's comments.

Mr. Arthur Lewis: Is the Minister aware that the red dictator, Ken Livingstone, has been joined by the blue dictator of the Tory party in speaking against the abolition of the GLC? Can we be assured that the Tories there have not been got at by the reds in County Hall?

Mr. King: I do not believe that Councillor Richard Brew has ever been described as a blue dictator. However,


I note the comments that have been made, and I am aware of the views advanced by those who support the retention of the metropolitan counties. I am also aware of the strong feelings of those who believe that there should be significant change.

Mr. Stephen Ross: Does the Secretary of State expect to publish any documents on the future of the metropolitan counties and the GLC?

Mr. King: We have no plans to do so.

Regional Water Authorities (Chairmen)

Mr. Edwin Wainwright: asked the Secretary of State for the Environment on how many occasions he has met the chairmen of the regional water authorities during the present wages dispute; and if he will make a statement.

Mr. King: I have met some of the chairmen of the regional water authorities several times during the present dispute over water workers' pay. The hon. Gentleman should be aware that I have referred to these discussions several times during exchanges in the House and I do not propose to make a statement on this matter, except the one that I shall make shortly.

Mr. Wainwright: Does the right hon. Gentleman realise that the settlement has caused a sigh of relief to be breathed in thousands of homes in this country? Next time anything similar happens in the water industry, may I beg the right hon. Gentleman to be careful how he intervenes? Does he not think that his interference in reducing the 6 per cent. offer to 4 per cent. had a grave influence on the dispute? For goodness sake talk to the people involved, but do not interfere with the figures.

Mr. King: This is an opportunity to clear one point. The suggestion that I intervened and instructed the water employers that 4 per cent. and no more should be offered is quite untrue. The hon. Gentleman knows that the employers' opening offer was 4 per cent. As a result of the gap that then divided the two sides, the employers offered arbitration as long ago as last November. There might have been a happier outcome if that offer had been accepted then. The water employers at no time had any intention of opening at 6 per cent. and made that abundantly clear.

Water Industry (Dispute)

The Secretary of State for the Environment (Mr. Tom King): With permission, Mr. Speaker, I wish to make a statement to the House about the water industry dispute. The House will note that, following the findings of the chairman of the committee of inquiry set up by ACAS, agreement was reached last night in the National Joint Industrial Council for a settlement of the pay dispute and an end to the strike.
The terms of the settlement are as follows:

i. the increase in the base rate should be 7·3 per cent. over 16 months, equivalent to 5·5 per cent. on an annual basis. This is exactly as recommended by the mediator a month ago on 23 January;
ii. a number of the employers' proposals made in their offer on 6 February were adopted. These were improved payments under the national productivity scheme equal on average to approximately 55p per week; an extra day's holiday for employees with 10 years service; the introduction of a scheme for the payment of wages by credit transfer, for which the chairman proposed £75 rather than the employers offer of £50 as a single lump sum payment; and a minimum rate of £5 for employees taking part in local schemes for greater flexibility in working hours rather than the £4 offered by the employers which will apply to only a limited number of employees. In addition, there will be, with effect from 1 April 1984, a one hour reduction in the working week.
iii. the chairman's findings and the settlement go beyond what had previously been on offer in only two significant respects—

a. £5 of bonus payments are to be consolidated into the basic rate, which will increase average earnings by about 2 per cent. and
b. the service supplement payable to those with over five years' service is to be paid to those with more than two years' service and to be raised, as in the employers' offer, from 2·5p per hour to 5·2p per hour. This adds 0·4 per cent. to average earnings over and above the employers previous offer.


The House will note that the chairman made no recommendation in support of the unions' central claim for comparability with other groups.
I should now tell the House the present position in the country. Ninety-one thousand properties are without normal mains supplies and 8·2 million people have been advised as a precaution to boil water. The quality of effluent from many sewage treatment works has deteriorated, but there have been very few serious effects on rivers. The House will appreciate the hardship and distress represented by the figures. None the less, it will also recognise the fact that after a four and a half weeks strike over 99 per cent. of users continue to receive their water supplies.
The water authorities and companies deserve every credit for this substantial achievement in keeping their systems running. The exceptional efforts of their staffs have maintained this essential service and safeguarded public health, and I pay full tribute to them. [HON MEMBERS: "And the unions".] Having said that, the House will recognise how damaging this dispute has been for all

concerned. The water authorities and companies have been unable to maintain their normal service to all their customers, many of whom have suffered real hardship.
The manual workers went ahead with the strike in spite of an offer worth more than £10 per week on average. They have gained little more than £3 per week on average on top of that offer. In the process, they have lost many hundreds of pounds. For many of those involved it will take two to three years to recover the difference.
The cost of the water settlement cannot be found by raising water charges this year. Nearly all the water authorities have already set their budgets for next year. It will have to be met by further economies in operating and manpower costs.
The message of this dispute is clear. In industrial action of this kind there are no winners. There were always arbitration procedures available in the industry to resolve this dispute without a strike. The employers offered this on 11 November and again throughout the dispute. It has been an unnecessary strike. I trust that normal working will be resumed immediately and a full service restored to every customer as quickly as possible.

Mr. Gerald Kaufman: The Opposition share the satisfaction that will be felt throughout the country, though, if the evening press is to be believed, not by the Prime Minister, at the ending of this unnecessary and damaging dispute, but the House will have listened to the Secretary of State's sour and ungracious statement with a good deal of distaste. It was flavoured with the arrogance and insensitivity that provoked the strike in the first place. It was also irresponsibly provocative. Has the Secretary of State considered what the effect of belittling the settlement might be on workers considering their union's recommendation to return to work? If the unions have gained so little from the strike, why were they not offered this settlement in the first place, last November?
Can the right hon. Gentleman say how long it will take for the water system to gel: back to normal, when those having to use standpipes will regain their domestic supply, and when those now boiling water will no longer have to do so? What will be the cost of putting right the damage to the system?
In the debate last week, when I pressed for the inquiry that in fact took place—[Interruption.] Oh, yes; we asked for the inquiry. At that time, the Secretary of State stressed the importance of both sides accepting the inquiry's findings. I trust, therefore, that he will be gratified that both sides have accepted its findings and that the unions have honoured their agreement.
Has the Secretary of State reflected that if he had not intervened so damagingly on 11 November there would have been no strike, no hardship to householders, no pollution of rivers, and no costly damage to the system; and almost certainly a negotiated settlement last autumn would have been at a lower level than the one now accepted?
Has not the Secretary of State's intervention turned out to be a very expensive affair? Will the Government now abandon their invidious, discriminatory, back—door incomes policy, conducted by the arm twisting of walling employers? If the right hon. Gentleman, the Secretary of State for Employment and, above all, the Prime Minister have learnt their lesson, it may be that some good will come out of this sorry affair.

Mr. King: The House will be interested to recall the right hon. Gentleman's opening words, when he accused me of making a sour and ungracious statement. I must tell him that, if the cap fits, he should wear it. His attempt to rewrite the history of the dispute makes no impression on anybody who knows its background. If he has made any attempt to study the matter, he must know that many people in the union movement predicted that there would be industrial action in the water industry. It was to be the focus of pressure this year, and people know that to be the case.
The idea that a change being made in any opening offer provoked industrial action that would otherwise not have taken place is a total fallacy. The right hon. Gentleman must be about the only person in the country who still thinks that if a higher opening offer had been made there would have been a lower ultimate settlement. That is absolute rubbish.
The right hon. Gentleman attempts to claim the credit for suggesting the format of the committee of inquiry, but he does no credit to the employers who offered that on 4 November and continued to offer it throughout the dispute. It was enshrined in their national agreement.
The disgrace that the right hon. Gentleman bears is that at no time did he call upon the unions to honour the national agreement. Every old person who, during the past four and a half weeks, had to go to a standpipe in freezing weather has noted that he made no effort whatsoever—and nor did his right hon. and hon. Friends—to ensure that national agreements were honoured and that the strike was avoided.
The right hon. Gentleman asked when service would return to normal. Obviously that will vary in different parts of the country. I wish to make it clear to the House that, in the interests of all those suffering the present hardship and distress, I have asked the water authorities to ensure that normal service is resumed as soon as possible and that they use all available means to achieve that.

Mr. Tony Durant: Does my right hon. Friend accept that many of the workers in the water industry were very worried by the strike and did not wish to participate in it but that the closed shop arrangement forced them to do so? Does he further accept that the settlement will, in the long run, cost jobs in the industry?

Mr. King: There is no question but that I and any hon. Member who has spoken to constituents who are water workers know that they fervently hope that there will never be another water strike. Even if the right hon. Gentleman denies it, they know all too well just how expensive it has been and the losses that they have incurred. It is a staggering thought. It was exactly a month ago that the mediator made his recommendations. They did not have to accept them but could have gone to arbitration. Had they done so, no one would have lost a day's pay and they could have still pursued the claim. Now, as a result of union leadership, they have lost hundreds of pounds which, I estimate, will take them between two and three years to recover.

Mrs. Shirley Williams: I offer the Minister my contribution to a shrivelled bouquet to the right hon. Member for Manchester, Ardwick (Mr. Kaufman), who obviously single handedly sorted out the strike. Will the Minister ponder on the fact that the result of the settlement is not that there are no winners but that the country is to

some extent the loser? Will he confirm that there has been a substantial deterioration in what was already a ramshackle water system?
As 2 million people are waiting to make wage settlements during the next few months, will the right hon. Gentleman assure the House that the 9 per cent. annual rate that will emerge from the settlement will not be regarded as the norm? Will he tell the Opposition the extent to which, if one gives people with muscle well above the inflation rate, those without muscle end up either receiving less or with no jobs at all? Will he confirm that many water workers made a substantial contribution to maintaining emergency supplies?

Mr. King: I respond immediately to the right hon. Lady's last point. I pay tribute to those workers who honoured the emergency cover, but I am afraid that it was a far from uniform practice. There were some extremely unattractive incidents when arguments occurred about whether old people in difficult circumstances represented an emergency. But I pay tribute to those who honoured the emergency cover.
One of the lessons we learnt from the dispute is not how ramshackle is the water system—obviously with bursts there are problems—but how well the system performed. Some of the more modern plants performed extremely well. I have no doubt that one of the effects of the dispute—under which the system was put to a real test—will, as my hon. Friend the Member for Reading, North (Mr. Durant) said, be greater automation and mechanisation, more modern plants and, I am afraid, some reduction in manpower costs that will obviously fall on the workers.
On the annual rate, certain factors in the water industry concern the amount of bonus, which is outside the basic rate. The mediator and the chairman of the committee both confirm the going rate at 7·3 per cent. for 16 months, which establishes an annual rate of 5·5 per cent.

Mr. Robert C. Brown: Is the Minister aware that I appreciate his difficulty because he has finished up with egg on his face? Will he be a little more generous and concede that 99 per cent. of water consumers received their supplies due in no small measure to the sense of responsibility of employees in the industry?
Is the right hon. Gentleman aware that each region of my union was in touch with the health authorities about the cases to which he referred concerning the elderly, those on dialysis machines and so on? He should be generous enough to concede that point.
Has the right hon. Gentleman now learnt his lesson? Does he realise that the dispute would not have occurred had it not been for his flat-footed intervention? Has he learnt the lesson of honouring the Prime Minister's election pledge to allow free collective bargaining to operate?

Mr. King: The hon. Gentleman referred to contact with health authorities. I must tell him that part of the procedure for emergency cover under the closed shop arrangement was that there should be contact with water authorities. Many needy cases are not brought to the attention of the health authorities. They may be dependent on the social services departments of local authorities, and urgent action may have been required. If the hon.


Gentleman is not aware of that, he should be. There were a number of distressing cases, something which I hope he would not condone.
The hon. Gentleman cannot honestly believe that the strike was caused through an argument about an opening offer. He knows that the union claim was in excess of 20 per cent. The unions were determined to achieve that figure. They have fallen far short of it. He should not refer to egg on my face. He is a Member of Parliament sponsored by the major union concerned in the dispute. No doubt he will wish to discuss with his members why they were led into industrial action by their leaders that has resulted in a loss of earnings for them this year.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call four hon. Members from each side and then move on to the other two statements.

Mr. Jim Spicer: My right hon. Friend has made it clear that the wage award will not be passed on to consumers this year. As the fact that that applies to this year only will be in everyone's mind, will he give an assurance that it will be an ongoing process and that the consumer will not be allowed to suffer as a result of wage awards above the rate of inflation?

Mr. King: As my hon. Friend knows, the Government have taken a close interest in the performance of water authorities. We have set performance aims for each authority which clearly set out manpower costs. I was glad that the chairman of the negotiation committee, Mr. Len Hill, confirmed that those aims will be adhered to. The only way in which that can be done is through economies in costs, not by passing on charges to the consumer.

Mr. Peter Hardy: Does the right hon. Gentleman accept that much of the problem arose from his reorganisation of the water industry? Does he accept that if the employers had not been facing the possibility of new jobs there might have been a more peaceful situation earlier?

Mr. King: I do not accept that at all. Anyone who knows the background to this knows that the issue of comparability with gas and electricity workers had been in existence for three years. The pressure had been building up and it is sad that a dispute of this kind was inevitable, but the background is a great deal longer than some people suggest.

Mr. David Madel: Will the Government make an announcement soon about rebates for people who have been without water for some time? Does my right hon. Friend agree that the very least that those people can expect is some form of rebate in view of all that they have suffered during the strike?

Mr. King: I well understand the concern about that. Clearly there is a valid point, as people who pay through a meter system do not have to pay for a supply when they are disconnected. The National Water Council is considering the matter and I hope that it will be possible to make a further statement later.

Mr. James Lamond: If we are to believe the Minister's desperate attempt to talk down the settlement reached as a result of the strike, may we take it that if other public service unions seek settlements at similar percentage levels there will be no girning from him

or from anyone else on the Government side and that he will try to deflect any anger in Downing Street if other unions manage to achieve the same moderate increases that he has tried to tell us were forced on the water workers?

Mr. King: I am not trying to do anything of the kind. My duty in making a statement to the House—no Minister would dare to do otherwise—is to give the facts. I have to make clear the figures involved in the settlement. I have seen some propaganda and I have heard some people shouting about victory. I well understand the reason for that, as some of their members may be having second thoughts about why they were led out in the first place. It is my duty to make the facts clear.
As the hon. Gentleman knows, I followed the matter very carefully, and the facts that I have given are correct. I believe that the going rate increase of 5·5 per cent. approved by the mediator and the chairman is too high. It is much more than will be obtained by workers in private industry and by many people in far less secure jobs. Nevertheless, that is the decision and it must be accepted, but I hope that the country realises the implications.

Sir Kenneth Lewis: Does my right hon. Friend agree that the most important thing now is to get back to normal working in the interests of the consumer and especially of those who have been badly affected by the dispute and have had no water for the past few weeks or have had to get it from standpipes? Will he therefore press the authorities to use every means—I believe that that was his own phrase—including the use of private contractors, to put the system right as quickly as possible and not to wait for that to be achieved through overtime working, which would take far longer?

Mr. King: As I said, I have asked the water authorities to use all available means. Obviously I hope that the manual workers will return to work immediately and make their contribution, but it would clearly be intolerable if the authorities did not use every other means available to them. The suggestion that people should be kept waiting for three or four weeks to be fitted into an overtime rota would, I believe, be totally unacceptable to everyone in this country. Therefore, I wish the manual workers to make a major contribution and I want contractors to come in as well so that those who have already suffered distress for far too long may be reconnected at the earliest possible opportunity.

Mr. David Penhaligon: Will the Minister explain the position of local authority employees who do the same or very similar work? Does he agree that they are now at an unfair disadvantage?

Mr. King: I certainly hope not. There are separate negotiations for the separate groups of workers. On the wider issues, as the hon. Gentleman knows, both the mediator and the chairman specifically declined to make any recommendations in respect of any comparability claim in this matter. That is a very important decision.

Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that this has been one of the most botched-up wage negotiations in recent times? Does he further accept that this will be one of the most damaging and divisive settlements in this wage round? Does he agree that if gas, electricity and other public service workers seek the same increases, inflation


will rise again and workers in the private sector will be disadvantaged? Is it not time that public sector workers were told that prices cannot continue to rise if industry is to recover?

Mr. King: I certainly endorse the second part of my hon. Friend's remarks. That is exactly the feeling of what I said about the going rate established in this case. It is far too high. It is significantly above the current rate of inflation and it is more than can be justified. I very much hope that all public sector workers recognise, as I am sure that many do, the importance of settling for sensible pay levels because the most important thing for them and for all of us is to see private industry recover as well.

Mr. Terry Davis: In the light of the settlement and the doctrine of collective responsibility, how does the Secretary of State justify the Government's refusal to make better offers to those who carry out vital life-saving work in the Health Service?

Mr. King: As I have made clear, each claim must be settled on its merits and it would not be right for me to comment on other claims now. In this dispute, the Government followed the proper procedures for the case. Negotiating procedures were available and open to be used, and it was obligatory on those concerned to use them. The challenge and the tragedy of this dispute is that the unions declined to observe the final stages of an existing national agreement. It was indeed an unhappy dispute, but the problem originally stemmed from failure to honour the national agreement.

Foreign Affairs Council (General)

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): With permission, Mr. Speaker, I will make a statement on the general aspects of the Foreign Affairs Council which met in Brussels on 21 and 22 February, at which my right hon. and noble Friend the Secretary of State for Trade and I represented the United Kingdom. With the permission of the House and, I gather, at the request of the Opposition, I will deal with trade matters separately.
The Council agreed that the 1984 elections to the European Parliament should be held throughout the Community in the period from 17 to 20 May 1984. This means that we in the United Kingdom will vote on Thursday 17 May 1984.
The Council had a further discussion of the European Parliament's proposals for a uniform procedure for future elections to that Parliament. It is now accepted that it will not be possible to reach agreement on a uniform procedure in time for the 1984 elections, but the Council decided that a further effort should be made to see whether agreement could be reached on a common basis for extending the franchise.
There was a first discussion of the Commission's paper on Greenland's application to withdraw from the Community. This subject will be on the agenda of the March Council, when there will be a more detailed discussion.
Ministers took note of the Commission's report on seals. This report will provide the basis for a review by the Environment Council on 28 February of the case for further Community action.
The Commission introduced briefly its green paper on the future financing of the Community, which is one of the documents debated by the House on Monday. The Council agreed to discuss the paper further at its March meeting. I reminded my Community colleagues that the United Kingdom would certainly wish these budgetary matters to be discussed at the European Council—that is, at the summit meeting—on 21 and 22 March.
There was a preliminary discussion in the Council of the Community's attitude towards a new international sugar agreement. I made clear our support for the Community joining a new agreement and pressed for the Community to play a realistic, full and constructive part in the negotiations.
Finally, there was a ministerial negotiating conference with the Spaniards at which Community declarations on the customs union and on the European Coal and Steel Community were presented to the Spaniards.

Mr. Ioan Evans: Hon. Members know that direct elections are to be held between 17 May and 20 May. Opposition Members are pleased to note that there is a failure to agree on a uniform electoral system. We welcome the decision that the European elections in the United Kingdom will be conducted not on a proportional representation system but on the traditional British system of first past the post. We support opposition to the proportional representation system because it provides no real connection between the electors' first preference and the final result. It also breaks the vital link between specific communities and their elected representatives.


That link would be severely weakened if Members of Parliament were chosen through party lists or multi-Member constituencies.
Given the long delay in reaching a conclusion about refunds for the 1982 budget, and the increasing role of the European assembly in determining the form of refunds to the United Kingdom, what progress has been made in determining Britain's contribution to the Common Market in 1983? What views have been expressed by the Government on the Commission's green paper on the future financing of the Common Market, with the various options for increasing the EC budget that were dealt with in the debate on Monday?
In view of the clear demand by the people of Greenland to withdraw from the EC, will the Minister ensure that there will be no undue delay in meeting the wishes of the people of Greenland as that will set an important precedent for the British people?

Mr. Hurd: I note what the hon. Gentleman has said about the electoral system. As he knows, the Community is about to discuss its long-term restructuring of finances. What the Government have said, and what I made clear yesterday in the Council, is that Britain must insist that in parallel with that long-term discussion, which we thoroughly support and wish to succeed, there must be urgent discussions about an interim solution for Britain in 1983 and later. My right hon. Friend the Financial Secretary to the Treasury made clear in the House on Monday the Government's general views on this. There was no substantial discussion on it in the Council yesterday.
I advise the hon. Gentleman against hitching himself to the Greenland wagon. The matter will take a long time. We have just received the first Commission report. It is clear that many matters of substance will have to be discussed. We have no desire to stand in the way of the decision of the people of Greenland. Matters of substance have to be discussed. During our discussions this week in the Council with the member states of the Community, it became clear that they wanted to establish that there would be no premium for a country wishing to leave the European Community.

Mr. A. J. Beith: How can it possibly be claimed that with five years between elections there has not been time to agree on a common electoral system, especially as the European Parliament has brought one forward? Is not the truth that the Government have held up the timetable because of the Prime Minister's personal determination never to see any kind of proportional system used in any election in Britain, and that the Labour party supports that view because anything which makes a mockery of British participation in the European Parliament is welcome to it?

Mr. Hurd: The hon. Gentleman is quite wrong. This is a turbulent question in virtually every member state. It is a question not only of whether one is in favour of proportional representation but of which system one wishes to agree upon. However, it has not been possible to reach agreement.

Sir John Biggs-Davison: Is it not open to our partners to reach agreement by adopting our system? Will Her Majesty's Government continue their resistance to the adoption of any system of proportional

representation for the European assembly, bearing in mind that if it were adopted that would certainly be used as a precedent for our national elections to this House?

Mr. Hurd: Discussion will continue on this matter in the Community. It is clear that there will be no change in the European elections in 1984.

Mr. Nigel Spearing: Apart from constitutional issues, the general Council appears to be dealing with matters which are the prime responsibility of the Exchequer and the agriculture, industry and energy Departments. Will the Minister comment on that?
Secondly, in respect of the finance green paper, can the Minister tell the House whether there are other Governments who do not wish to expand the Community's budget?

Mr. Hurd: The general affairs council tends, from time to time, to deal with general affairs.
The answer to the hon. Gentleman's second point is yes, there are.

Mr. Anthony Nelson: Is my right hon. Friend aware that many hon. Members believe that the ideals and potential of the European Community, which many hon. Members uphold, will not be interfered with if a differential system of electioneering operates throughout member countries?

Mr. Hurd: I do not think there is necessarily a connection between what the European Parliament does and what individual member states do in their national elections. For the time being, that is a subject on which progress towards a uniform system will continue to be slow and complicated.

Mr. David Ennals: To move into less controversial waters, could the Minister add a few more sentences to the sentence he uttered about the decision on seals and the environment Ministers' conference on 28 February?

Mr. Hurd: The German Presidency, the German Foreign Minister, was anxious to impress on everyone his view that this was a matter of high political interest and importance. We all concurred with that. When my hon. Friend the Under-Secretary goes to the environment Council next week he will wish to discuss with his colleagues the latest position, the clear pressure for action combined with the response of both the Canadian and Norwegian industries in suspending the impending culls of baby seals.

Mr. Robin Squire: Is my right hon. Friend aware that there are hon. Members on this side of the Chamber who are disappointed that 10 years has not been sufficient to enable Britain and her partners to find a common system, whatever that system may be? Before my right hon. Friend embraces too openly the congratulations of the hon. Member for Aberdare (Mr. Evans), he should appreciate that the present system is the only system under which the Labour party has a chance of being the majority party, either in that Parliament or in this one.

Mr. Hurd: I am not embracing anyone on this subject. I am trying to stay clear of it. I am reporting on a Council meeting at which it became clear to everybody that there would not be a change in this respect for the European elections next year.

Mr. Robert Parry: Will the Minister ask his right hon. Friend, when he next meets the Council of Ministers, to express his concern and the concern of the House about the repression of human rights in Turkey, especially the torture and imprisonment of the leaders of the Turkish peace association, and call for the early release of its president, Dr. Dikkerman, a former ambassador, who is critically ill?

Mr. Hurd: That subject was not discussed in any detail. I know that strong views are held. I am sure that the hon. Gentleman will reflect on the fact that Turkey has set itself a timetable for a return to democracy. Will we help her to achieve that and to improve the position regarding human rights by ostracising or by encouraging her?

Mr. David Ginsburg: Does the Prime Minister intend to call a general election for Thursday 17 May as that date features in the Minister's statement? More seriously, will the right hon. Gentleman confirm that there are no legal or expenditure problems which could arise if elections are held on that date?
On the method of election, will the right hon. Gentleman recognise that the sense of disappointment resulting from his statement about working out a common method extends to what has been heard from the Opposition Benches since it represents a serious retreat from the worthy position of the Leader of the Opposition?
With regard to extending the franchise, will the right hon. Gentleman say that the Government will stand firm on the position that they adopted in Opposition when they favoured an extension of the franchise for the European elections?

Mr. Hurd: The hon. Gentleman's first question is for the Prime Minister. The second question is for the Home Secretary.
The Government wish to extend the franchise. There is difficulty—I am sure the hon. Gentleman understands this—in legislating in this House in one way and then finding that there is a common Community position in a different direction based on another principle. The Government wish to extend the franchise to British citizens living in the Community for European elections. However, we want to do so in a way that is compatible with what other countries do. This is a complicated technical question, but I think that it will be discussed at a slightly faster rhythm than the electoral system.

Mr. Albert McQuarrie: My right hon. Friend has said that he does not want to go into the subject of Greenland, but has his attention been drawn to the fact that if Greenland is permitted to leave the Community British fishermen will have to pay for the right to fish in Greenland's waters? In any future discussions within the Community on Greenland's withdrawal, will the right hon. Gentleman safeguard the interests of the British fishing industry?

Mr. Hurd: Yes, Sir. I think that my hon. Friend is referring to the Danish proposal, but this will be a negotiation on matters of substance. In the negotiations with Greenland we intend that the interests of the Community and of British fishermen in particular will be strongly upheld.

Mr. Peter Hardy: The Minister has referred to Spain. Will he give an assurance that the

present trading situation, which is grossly unfair to our steel industry, and especially our special steels industry, will be brought to a fair balance at an early date?

Mr. Hurd: With your permission, Mr. Speaker, I shall deal with that point on the following statement.

Mr. Michael Brotherton: Although I welcome the fact that there is to be no change in the electoral system in the short term, will my right hon. Friend assure the House that there will be no change in any electoral system as far as this country is concerned without the full approval of this House?

Mr. Hurd: It would be presumptuous of me to answer that question, but I am sure that my hon. Friend is right.

Mr. Tam Dalyell: Can a "slightly faster rhythm" be given to putting on the agenda the fraud and fudging that is now associated with end user certificates in the arms trade? In particular, should not Ministers discuss the alleged sale of Exocets to the Sudan—[Interruption]—which cannot be said to be an unimportant subject? Either it is true or it is not. If it is true, it should jolly well be discussed by European Ministers.

Mr. Hurd: I read the press story. Of course, that subject did not come up at the Foreign Affairs Council and is not a matter for it. It is essentially an issue for us to investigate and we can then take any decisions that may arise.

Mr. Tony Marlow: My right hon. Friend said that discussions on new forms of finance for the Community and on our budget rebate would be taking place in parallel. Will he give a categoric assurance that there will be no linkage between the two and that Britain will get a fair deal from the European budget irrespective of when and whether there is a new system for that budget? Will he also give a categoric assurance that the Government will not agree to any further sources of European finance, as there is no evidence as yet—indeed, the evidence is rather to the contrary—that European institutions manage to spend money more efficiently than we do and particularly as any further expenditure given to Europe will lead to a diminution in the authority of the House?

Mr. Hurd: We want a new system, because the present system causes the imbalances. We want to get away from having to negotiate temporary refunds. The fact that we want a new system does not mean that we agree to additional own resources. It means that the present system is not working properly. Therefore, we want that longterm discussion to succeed, but at the same time we cannot wait for it to come to a conclusion before getting further interim measures.

Dr. J. Dickson Mabon: From his discussions with Ministers, can the right hon. Gentleman say how many member states have said that they intend to follow the European Parliament's recommendation and institute a modified form of proportional representation in their countries and how many intend to adapt their national systems of proportional representation for the elections on 17 May?

Mr. Hurd: I do not know the answer to that. I think that all member states will now examine their positions in the light of the failure to agree on a common system. I do not know what the result of those reflections will be.

Foreign Affairs Council (Trade)

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): With permission, Mr. Speaker, I will make a statement on the trade aspects discussed at the same Foreign Affairs Council on 21 and 22 February.
The council endorsed the agreement reached with the Japanese by the Commission providing for export restraint by Japan, agreed that the Commission should pursue vigorously the opening of the Japanese market, and should by July this year review the state of the Community's trade relations with Japan and make any necessary proposals for further action.
The problems that the Community is having with the United States of America over agricultural trade were discussed. The council endorsed the continuing efforts of the Commission to resolve these problems with the United States of America and agreed that the presidency—the German Foreign Minister—should send a message to the United States Secretary of State underlining the political need to work together to avoid any worsening of the problems.
Finally, the Commission gave the council an interim report on its continuing talks with the Spaniards on problems relating to the EC-Spain 1970 agreement. My right hon. and noble Friend the Secretary of State for Trade underlined British concerns, welcomed the Commission's undertaking to pursue further its efforts with the Spanish Government, and made it clear that we looked for precise improvements in the operation of the agreement and the question of tariff imbalances.

Mr. Peter Archer: The House will wish me to thank the right hon. Gentleman for that statement, but would he be surprised if it gave rise to something less than dancing in the streets? On the agreement with Japan, is it true that the matter that occasioned great anxiety in the Community was the import of video tape recorders from Japan? Will the right hon. Gentleman confirm that the agreement limits the import of video tape recorders from Japan to 4·5 million per year?
Is it true that of the 5 million imported into the EC last year, about half were imported into the United Kingdom? If the purpose of the agreement is to help to protect and nourish a European industry in high technology consumer goods, do not this country's interests lie in producing more video tape recorders in Britain? What industrial policy do the Government have in mind to ensure that a limit on the import of Japanese tape recorders does not result simply in the import into Britain of higher priced French and German recorders? Can the right hon. Gentleman confirm that the agreement includes 8 mm video tape recorders, which many people believe will in any event shortly replace the present 16 mm ones?
Have the Government now realised that the EC and the United States of America are in danger of moving towards a subsidy war in which more and more taxpayers' money will be poured into surpluses to be exported at knock-down prices to the Soviet Union? Whatever the view of other European Governments, is it not in the interests of this country to get rid of the common agricultural policy and to ensure that any future subsidies are reflected in lower prices to our consumers?
On the talks with Spain, are not the French Government insisting on resolving the problems for French agriculture before the EC proceeds to Spain's accession?
Are the Government displaying a corresponding zeal on behalf of the car, steel and footwear industries in Britain? Will the right hon. Gentleman now answer the question that I put on Monday to the Minister for Trade, which somehow escaped answer? How long is it likely to be before the British car industry sees an end to the situation in which Spanish cars can be imported into the United Kingdom at a rate of duty that is slightly more than one tenth of the duty paid by British exporters of cars to Spain?

Mr. Hurd: I confirm that the overall ceiling for video tape recorders in the new arrangement negotiated by the Commission is 4·5 million units. I understand, subject to correction, that that covers all types. We had to take into account British industry's need for kits as a result of the arrangements negotiated with the Japanese. The Secretary of State pressed that point at the council and received an assurance that the Japanese could supply, under the new arrangements, adequate numbers of video tape recorder kits at economic prices to meet the needs of our industry.
As the House knows, we want to change the operation of the CAP in a fairly radical way. We also want to avoid the subsidy war and the clash between these two trading giants. Because we are worried about the political implications we agreed that the German Foreign Minister should represent those worries at this stage to the United States Secretary of State while discussions with the Americans are still going on about the technical problems.
As regards Spain, we are dealing with the defects, well recognised throughout British industry, of an agreement in 1970 between the Community and Spain. Part of that is the implementation of the agreement and the way it is carried out, and part of it is the tariff imbalance to which the right hon. and learned Gentleman referred. My right hon. and noble Friend pressed hard again yesterday for the Commission to take vigorous and continuing action to alleviate both those problems. We are also taking every opportunity—I shall have an opportunity tomorrow when a Spanish Minister comes here—to impress our concerns vigorously on the Spaniards themselves.

Sir Julian Ridsdale: Is my right hon. Friend aware how much one welcomes the industry-to-industry talks to try to correct the imbalance of trade between Japan and the EC? Will he assure the House that these talks will not bar the way to getting high technological Japanese investment in the United Kingdom?

Mr. Hurd: That is an important point on which I agree with my hon. Friend.

Mr. Bob Cryer: I notice that the Minister said that the Community has reached agreement about export restraint by Japan, and will review the position after 12 months with a view to taking further action. What is he doing about the volume of cars, which is four times greater, coming into the United Kingdom from other EC countries? Does the Minister not realise that if Japanese cars represent a problem, imported EC cars represent a far greater problem? This year our car production has been at its lowest since 1957. Over the last 10 years there have

been 1 million fewer vehicle units. If we do not do something about it the EC will take over our motor vehicle industry and destroy it.

Mr. Hurd: I would argue in return that Japan is a special case. As a Government we do not want to get into the business of erecting restrictions against every supplier whose goods our customers wish to buy. We certainly do not want to get into a trade war with other members of the Community in which we would stand to lose more than we would gain.

Sir Charles Fletcher-Cooke: Is my right hon. Friend aware that we very much admire the brevity and conciseness of his statements about the Council of Ministers but that he sometimes overlooks the functions of the Council and the functions of a legislature? We never seem to get reports about how draft directives and draft regulations are treated by this important legislature. For example, can he tell us what progress, if any, there has been with those old friends, the product liability directive or the fifth directive on company law? Several of these matters have now been before the Council for about 10 years. When shall we hear something about them?

Mr. Hurd: I have the impression that these statements are so long as to be somewhat wearisome, and I hesitate to add to them. As my hon. and learned Friend knows well, we have a system by which the scrutiny committee examines precisely the documents in which he is interested, and decides which of those ought to be discussed fully in the House. Debates are then arranged. That is a better system than trying to go into the details of each directive and draft regulation at the time of statements.

Mr. Arthur Lewis: The Minister will probably not have had time to listen this morning to Radio 4. Will he ask for a transcript of a programme in which a prominent American made a frightening statement about the possibility of the United States entering a trade war against Common Market countries and threatening to take serious action? If that were to happen, it could have a deleterious effect on Britain and on the rest of the Common Market and would upset all the plans and discussions that the Minister had yesterday.

Mr. David Ginsburg: Name him.

Mr. Lewis: I will not because I cannot remember his name. I have asked the Minister to get a transcript so that he can judge the matter. It was a prominent person, and his statement was frightening. The Minister should not sit there grinning and sneering. He should get the transcript and look at it because what was said was frightening.

Mr. Hurd: I shall certainly follow the hon. Gentleman's advice. There are protectionist voices on the other side of the Atlantic. I agree with the hon. Gentleman about the bad results for us if we got into a major trade war with the United States. There are also protectionist voices in the House. We have heard some of them this afternoon, and the same comment applies.

Mr. Jim Spicer: Does my right hon. Friend accept that, of course, hon. Members understand that priority should be given to discussions with Spain? At the same time, the Portuguese are indulging in unfair trading practices. Will my right hon. Friend give an


undertaking that in the coming months he will examine what Portugal is doing in advance of its entry into the Community?

Mr. Hurd: Staring at us at the moment is the problem with Spain. If my hon. Friend has particular problems as regards Portugal that he wants us to study or act upon, no doubt he will let us know.

Mr. K. J. Woolmer: In regard to Spanish trade and the high tariff barriers that Spain exercises against our commodities, may I draw the Minister's attention again to the way in which the French are prepared to hold up Spanish accession to protect their agriculture, while Spain exercises a 30–32 per cent. tariff on wool fabric and a 33–36 per cent. tariff on knitted woollen garments? Is this not a demonstration that the French are prepared to talk about the principle of Europeanism but look after France, while this country appears to be selling British interests down the river in the interests of Europeanism?

Mr. Hurd: I remind the hon. Gentleman that Spanish accession, when it occurs, will solve the problem that he has raised. That is to say, at the end of the transitional period, which remains to be negotiated, the tariff imbalance would disappear. Therefore, we must not cut off our nose to spite our face. We have made it clear that since the earliest possible date for Spanish accession is later than expected, we cannot be expected to wait until then to solve our problem. That is why, both in the Council and directly with the Spaniards, we are emphasising the need for action by them on both aspects I described—the way the existing agreement is carried out and the tariff imbalances that it contains.

Sir Anthony Grant: Does not the Commission deserve congratulations, rather than carping, on the sensible arrangements it reached with Japan? Would not the most likely cause of a trade war, from which Britain would suffer as mach as anyone, be the implementation by us of the fatuous import control policy advocated by the Opposition?

Mr. Hurd: I am sure my hon. Friend is right. The arrangement negotiated by the Commission and approved yesterday by the Council is a step forward as regards the Japanese. It is not a complete answer but it is a step forward, and it would he sensible to welcome it as such. I agree entirely with the comment in the latter part of his remarks.

Mr. Ron Leighton: Does the Common Market believe in the virtues of unrestricted free trade? If so, why does it seek to raise obstacles to imports from Japan? If on the other hand it believes in trade management should not the Minister realise that our trade deficit with Germany is three times as great as our trade deficit with Japan? Should he not consider negotiating trade management with Germany before industry in places such as the west midlands is destroyed completely?

Mr. Hurd: Germany is an open market in which we can sell without hindrance. That is a major difference with Japan. The treaty of Rome and the Community show a general instinct towards free trade and competition but all member states agree that in certain industries and in certain circumstances it is necessary to protect our own. That is what we are doing through the arrangement we have been describing.

Several Hon. Members: rose—

Mr. Speaker: Order. I propose to call those lion. Members who have been seeking to catch my eye throughout.

Mr. Hal Miller: On the subject of trade with Spain, will my right hon. Friend accept that the tariff disparities in the case of the automotive industry are not just limited to the 37 per cent. tariff on the 108 per cent. of the cif value but that internal taxes raise it to an effective 66 per cent? Will he accept that his right hon. Friend the Secretary of State for Industry stated publicly in October that these discrepancies were grotesque and intolerable and that the situation was very much in the "Action" file. Is he aware that action is needed in the light of the fact that the Spanish industry is now bigger than ours and that further access to this market of a new Vauxhall model is about to take place? Does there not have to be some definite timetable for a conclusion to these negotiations?

Mr. Hurd: My hon. Friend is right. We are dealing not only with a tariff imbalance that appears in the agreement but with the way in which the Spaniards, through their administrative processes, implement the agreement and their own arrangements. That bears particularly hard on our car industry. We are dealing with an agreement between Spain and the Community. We are seeking to tackle it on a Community basis because that is the best way. We are continuously and energetically—my right hon. Friend, my hon. and learned Friend the Minister for Trade and Foreign Office Ministers—impressing on the Commission the need for action. We are also taking every opportunity to ram home our concerns direct to the Spanish Government.

Mr. Ginsburg: Will the right hon. Gentleman accept that there is a genuine, cautious welcome for what he says about the need for export restraint by Japan and the agreement that has been reached and also for what he says about opening up the Japanese market? This is a very difficult market to penetrate. Will he consult the Secretary of State for Trade to see what more can be done to assist British firms to gain entry to that market?
On the question of Spain, there are, of course, difficulties. Will he also accept, however, that it is important that Spain should enter the European Community to demonstrate that the spirit of internationalism—there is a newly elected democratic Government in Spain—is not totally dead on these Benches?

Mr. Hurd: One reason why it is important that Spain should enter is precisely that it would solve a problem of which hon. Members on both sides of the House are painfully conscious. As the hon. Gentleman says, there are other reasons. We shall continue to support the negotiations.

Mr. Keith Best: Is my right hon. Friend aware that one of the best means of dealing with Japanese imports is to encourage inward investment of Japanese companies into Britain so that their goods can be manufactured by British labour? Is he further aware that Wales has a larger number of Japanese companies than any other comparable region in the EC? Does he not agree that one of the principal reasons for those companies setting of in Wales is that this country is a member of the EC? Does


he not think that this process would be seriously inhibited and jeopardised if this country were to withdraw from the EC, as advocated by the Opposition?

Mr. Hurd: My hon. Friend puts it well. Nothing would knock new investment in this country from overseas more firmly on the head than any real likelihood of our withdrawal from the Community.

Mr. Tam Dalyell: Are we to understand that the Department of Trade or the Foreign Office are investigating the alleged sale of Exocets to Sudan? If the Council of Ministers is not the right forum to discuss end-user certificates, which is the right forum? It has become a dangerous fiasco when politicians in Third world countries, or other countries, can apparently pocket some £200,000 for signing a certificate for arms going to an undesirable place. That is the situation.

Mr. Hurd: The right approach, so far as the hon. Gentleman is concerned, is either to table a question on the matter or to write to a Minister whom he thinks should be able to reply.

Mr. Teddy Taylor: As the Common Market spent over £7 million a day last year dumping cheap food on world markets and as the surpluses are growing steadily, does not the Minister think that the best contribution we could make would be to put forward any kind of meaningful plan to reduce the amount of surplus? Was there any talk in these discussions about the horrifying information revealed by the Minister for Trade yesterday to the effect that our deficit in manufactures with the Common Market last year was over £5,000 million? That is equivalent to a drain of about 700,000 British jobs.

Mr. Hurd: There was no discussion on the second point. As regards the first point, I broadly agree with my hon. Friend. We have consistently stated in our approach to these long-term discussions that the priority must be to get effective control of the agricultural spending. All the other proposals put forward by the Commission, some of them good and some not so good, will not achieve the end that we have in mind unless there is more effective control than exists at the moment.

Mr. Nigel Spearing: Does not the range and importance of the matters on which the Minister has reported reflect the extent to which the Government and this House can no longer decide on them? In respect of the agricultural war with the United States, is it the

contention of the Commission that the United States is subsidising its exports to a greater extent than the Commission and the EC? Can the Minister say what the rough proportions are? If not, is it not time that the EC cut down the subsidies?

Mr. Hurd: It is abundantly clear that here one has two major agricultural producers, the Community and the United States, both of whom, through different practices, spend a great deal of money protecting their agriculture and achieving surpluses which it is then difficult to dispose of. We have seen recent American sales of subsidised flour to Egypt, which is not a traditional American market. It is a symptom of the problem which we will get into if we are not careful.

Mr. Anthony Beaumont-Dark: Will my right hon. Friend accept that most Conservative Members will agree that where competition is fair, British industry must shift for itself because we are a large exporting nation and industry must take its chance with other fair competition? Is he not aware that the Spanish situation is a great deal different? Many of us are disturbed by the emphasis that the Minister places on the EC negotiations, which is like trying to move through a sea of treacle. Will my right hon. Friend accept that the problem we are talking about is urgent and exists now? Will he agree that Spanish car exports to this country are growing at a rate of over 30 per cent. a year and that if the Government do not soon take action, unilateral if necessary, because the situation is so unfair, at least another 20,000 jobs will be lost in the west midlands? Is he aware that those jobs can be saved if resolute action is taken now rather than continuing to talk for month after month?

Mr. Hurd: Anyone who has visited Birmingham, Manchester or other main industrial centres recently will agree with my hon. Friend's analysis. This is something that is sorely felt and where urgent action is required. It will, I think, be much better to achieve that action on a Community basis for the reasons that I have already given. As regards unilateral action, I hope that it will not come to that.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 11 MARCH

Members successful in the ballot were:

Sir Victor Goodhew
Mr. Harold Walker
Mr. Edwin Wainwright

Electoral Law Reform

Mr. Michael McNair-Wilson: I beg to move:
That leave be given to bring in a Bill to amend the residential qualifications necessary for inclusion on an electoral register.
The motion relates to the reform of the Representation of the People Act and in particular to the entitlement of persons to vote. As the law stands a person entitled to vote as an elector at a parliamentary election in any constituency is one who is resident there on the qualifying date, that is, 10 October. That definition, like so many others in our law, seems eminently sensible and all-embracing. Clearly, someone living in a particular constituency wants to be able to vote there. In the course of my speech I hope to show that that definition is open to abuse, and that it has been abused.
Our electoral system is subject to a number of restrictions to preserve its integrity. For instance, people living in a constituency, no matter that they have lived there for a long time and are ratepayers, who fail to return their electoral registration form by a certain date are precluded from having their names included in the electoral register for the subsequent year. Persons on holiday may not have a postal vote because, it is argued, they do not have to be on holiday and can choose between coming home to vote and staying away. As section 1 of the Representation of the People Act makes clear, a person is not entitled to vote as an elector at a parliamentary election in any constituency in Northern Ireland unless he was resident in Northern Ireland during the whole period of three months ending on the qualifying date for that election.
I cite these examples of limitations that we have built into our electoral system because each, in its own way, is meant to safeguard the system against abuse—an intention with which I suspect we all agree. The House will therefore imagine my surprise when I was informed that 19 of the women who have been living in tents and caravans on common land outside RAF Greenham Common in my constituency for many months—although the byelaws governing the common specifically forbid camping—had applied successfully to be included on the local electoral register. How was it possible, I wondered, for people whose residential claim was based on an

illegality, legally to become electors at national and local elections in a constituency that was far removed from their homes?
The answer, so far as I have been able to discover, seems to lie in the fact that there is now no qualifying period for residence before applying to be included on the electoral register of any constituency, although earlier this century such a residential qualification existed, and, as I hope I have shown, one still exists in Northern Ireland.
The second factor seems to be that trespass, as a claim to residence, has been accepted since the case of Ford v. Beal in 1877, when a Mr. James Beal with his wife and children went to live in his mother-in-law's house, although she had not sought permission from her landlords for that to happen, as the rules governing her house required. Mr. Beal applied to be on the local electoral register, and his request was upheld.
From what I have read of the case, I am not convinced that it is on all fours with the women who are on common land at Greenham. Indeed, I am not clear whether Mr. Beal knew that he was breaking his mother-in-law's tenancy agreement, or whether her landlords sought to have him evicted. What I do know is that the Greenham women are aware that they are breaking the byelaw about camping on the common, and some of them have been successfully evicted by Newbury district council because of that byelaw. In other words, the 19 women have deliberately flouted the laws relating to the common to enable themselves to benefit from electoral law, and I, like many of those whom I represent, believe that to be an intolerable abuse. The Bill that I seek to introduce will remedy that situation. It will be very short, and will add a paragraph to the Representation of the People Act to the effect that a person will not be entitled to vote as an elector
if his claim as a resident is founded on illegal occupation of common land".
I submit that this change, although small, is significant, and will prevent the abuse to which I have referred.

Question put and agreed to.

Bill ordered to be brought in by Mr. Michael McNair-Wilson, Mr. John Heddle, Mr. R. A. McCrindle, Mr. Patrick McNair-Wilson and Mr. Michael Morris.

ELECTORAL LAW REFORM

Mr. Michael McNair-Wilson accordingly presented a Bill to amend the residential qualifications necessary for inclusion on an electoral register: And the same was read the First time; and ordered to be read a Second time upon Friday 4 March. [Bill 89.]

Orders of the Day — British Shipbuilders Bill

As amended (in the Standing Committee), considered.

New Clause 1

FORMULATION OF POLICIES AND PLANS

'(1) It shall be the duty of British Shipbuilders, after consulting any relevant trade union to formulate from time to time when it considers appropriate, or the Secretary of State so requires, corporate policies and plans regarding the carrying out of its activities in the most efficient manner.

(2) In making their formulation, British Shipbuilders will have full regard to improving productivity, decentralising management and operational centres, industrial relations and such other matters as the Secretary of State may specify in writing.

(3) The Secretary of State shall lay before each House of Parliament—

(a) a copy of any corporate policy or plan made under subsection (1) above, or
(b) where the Secretary of State is of the opinion that the disclosure of any part of the policy or plan is against the national interest, a copy of the policy or plan excluding that part.

(4) Section 7 of the 1977 Act (Formulation of the Corporation's policies and plans and conduct of the operations) shall cease to have effect.'.—[Mr. Willey]

Brought up, and read the First time.

Mr. Frederick Willey: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Ernest Armstrong): It will be for the convenience of the House to take at the same time amendment No. 4, in schedule, page 6, line 5, column 3 at end insert 'Section 7.'

Mr. Willey: This is partly an enabling Bill and partly grease to help privatisation. In that regard it is generally unacceptable, but an amendment was accepted in Committee that is both important and relevant to this debate. It provided some guidelines to the national interest. The Government withdrew their proposals and accepted section 4 of the 1977 Act, as it stood, which provides that full regard will be paid to certain important matters. The first, was co-operation with shipping and having a maritime policy. The second was accession to international organisations, which is important in relation to the European Community and the OECD. Then there is fair international competition on equal terms. The section also provides that full regard should be paid to regional policy, particularly on unemployment. The fact that we are retaining these provisions, not removing them, as the Government originally intended, is relevant to this debate.
Incidentally, in my view it would be better, in dealing with amendments of this nature, to deal with all the sections in part I of the Act comprehensively, so that the new provisions are clear and easy to follow.
Section 7 of the 1977 Act provides for the formulation each year of a corporate plan for the corporation's operations, covering, in particular, capital investment, research and development, the profit and loss, and employment of persons. Employment of persons was not

in the original provision, but was added, and of course the Secretary of State can add other matters. These matters are dealt with in the new clause.
We had a long discussion about these provisions in Committee, when the Conservative Members and the Liberal Member voted against section 7. The new clause provides for the repeal of section 7, so there should be broad agreement with what we seek to do.
I am not against corporate plans and policies. They have established themselves in one form or another in the nationalised industries, and generally they have been a good thing. However, we are against the definitions in section 7. First, section 7 provides for an annual corporate plan. That is quite unreal. It was unreal in the circumstances in which section 7 was accepted. Major investment programmes in the coal and steel industries had been agreed with the Government. However, those were not annual but long-term assessments. If we are dealing with corporate plans the first thing that we must recognise is that we are inevitably dealing with corporate and long-term issues that cannot be adequately dealt with on an annual basis. It has been quite impossible to have annual plans as envisaged by the Act in view of world economic conditions and the world shipbuilding market. Such plans have been unreal, have not given any effective guidance and have largely been useless.
I am not saying that a good deal has not been done, because it has. There have been capital investment programmes and if one reads the annual reports of British Shipbuilders it can be seen that there has been a good deal of effective corporate planning, but I am concerned about the annual corporate plans that have not been effective. That is proved, above all, by the Select Committee's report. The argument used to be that every now and again a Select Committee will look at a nationalised industry, and we had a Select Committee for that purpose. However, that has gone in the tidying-up of the departmental Select Committees. The remarkable thing is that although there is a casual reference to corporate planning, practically nothing at all is said about corporate plans in the Select Committee's report and inquiries. One would have thought that it would have been primarily concerned with the corporate plans, the changes made and why they have not turned out to be annual plans. I should have thought that the Select Committee would have been expected to deal with such things, but it has not. That is a reflection on the present provisions for the corporate plan.
How many people are there in the Department engaged upon the corporate plan and how many are there in British Shipbuilders? That activity has not been profitably used. The new clause proposes corporate plans from time to time when British Shipbuilders feels that they are appropriate or when the Secretary of State requires them. That seems sensible. In view of the way in which such plans have exhaustively engaged the Department and the corporation, I should have thought it was now time to provide such flexibility. There is a safeguard, because the Secretary of State can intervene if he feels that the corporation is not providing a corporate plan sufficiently early.
The purpose of the new clause is not only to get away from the concept of annual corporate plans but to provide more realistic guidelines. I have suggested that we should pay attention to efficiency, improving productivity and decentralising management and operational centres. Decentralisation is necessary today because some of the yards are in peril. I was worried that among the matters


that the Government have removed from the Bill is the provision for decentralisation—a matter that British Shipbuilders has tried to deal with effectively.
Shipbuilding is an assembly industry and the corporation recognises that industrial relations are of great importance. In addition, section 4 provides guidelines for the Secretary of State as to what is in the national interest. We must pay attention to shipping, the EC and the intervention fund. I was much encouraged by what the Minister said about the intervention fund. At any rate, we are all right until July and after that we shall have to hope for the best. At least the Minister is trying hard.
There must be competition on equal terms. We may have to deal with that unilaterally if necessary. In Committee we discussed the loss of the order for the cable-laying ship to Korea. Korea and the far east reduced their prices by 30 per cent. That results in unfair competition, which we are against. Those are the sort of points that should be reviewed, but not necessarily every year.
We should probaly now be reviewing diesels. British Shipbuilders should be considering that matter in the light of the report which the Government have. I am not being dogmatic about this because it is for the Government to act in the light of their experience in the past few years; I am suggesting that we should do something topical, realistic and effective. We must take effective steps now and not at the speed at which the corporate plans are considered at the moment. If the Government do not like the proposals it is up to them to suggest others. It was the Conservative party which voted against section 7—the matters which determine the corporate plan. In the light of that I should have thought that they are bound to say what their experience has taught them.
There is a case both for making the timing more flexible and for making the guidelines more realistic. Having said that, my last recommendation is that the corporate plan should be made public. I accept that there is a case for the exclusion of some matters and I do not want to argue about it. It is a difficult problem, about which I am not being dogmatic. Commercial confidentiality is important and there are other confidential matters in the world market. However, those problems could be met by sensible disclosure. In the present circumstances it is necessary that the plan that British Shipbuilders produces in consultation with the Government should be made public. We should know what its views are and they should be placed before Parliament. I have stressed throughout our debates on public corporations that relations with Parliament are important and I hope that these proposals will, in principle, be accepted. The Government should take the opportunity which they are now afforded to improve the provisions with regard to the formulation of the corporate plans.

5 pm

Mr. James Hill: New clause 1 is good in parts. We dealt with this matter in depth in Committee. I see that the hon. Member for Southampton, Itchen (Mr. Mitchell) has an amendment down further to expand clause 1.
The opening statement in a research note issued by the Library puts the matter in perspective. It states:
The whole of this Bill relates to the powers and duties of British Shipbuilders. It is not therefore directly a privatisation measure like, for example, the British Aerospace Act 1980. A closer analogy would be the Iron and Steel Act 1981 which

amended the legislation governing the British Steel Corporation. This Bill is simply to provide a means for the chairman of British Shipbuilders to form small companies and then, within the wisdom of his management, to privatise those small companies.
In other words, it seeks to allow the assets of those companies either to be purchased back by the former owners or, indeed, to allow new shareholders to be brought in. So, it is not an all-embracing Bill. It does not have the same scope as the Transport Act 1981 which set up Associated British Ports. It does not have the same impact. In fact, there were doubts in Committee that certain of the companies could ever be put on to the private market for the obvious reason, which was quoted time and again, mainly by the right hon. Member for Sunderland, North (Mr. Willey), that so many of these yards were almost at death's door. They had no orders, their labour forces were demoralised and they had to compete in world markets where the only policy was to submit the lowest tender, regardless of profitability. It was mentioned many times that Japan, Taiwan and Korea were our natural enemies in shipbuilding and that many British yards could not compete.
Many solutions were suggested. It was argued that we should have a scrap and build policy, that fiscal taxation measures could be introduced to help the British shipowner or that there could be slightly higher subsidies for British Shipbuilders, mainly for the merchant yards. The Bill, if it receives Royal Assent, would enable Vosper Thorneycroft, a yard in which I and the hon. Member for Itchen are interested, to be privatised.
There is a certain logic to new clause 1 which the Government did not accept in Committee. It gives the chairman of British Shipbuilders every possible avenue to formulate the assets of the company in any way he wishes—the design, development, production, sale, repair, and maintenance of ships and so on. The hon. Member for Itchen wishes to broaden this out into any sphere, including ship repairs, to obtain profitability.
There are good points in new clause 1. Nevertheless, I know that the right hon. Member for Sunderland, North would not like to see the assets of British Shipbuilders sold off. The Opposition made it clear in Committee that warship building is the profitable side of the industry and helps to keep the merchant shipbuilding side afloat. It was made only too clear in Committee that the profits of the warship side of the industry were almost a complete balance for the losses in the merchant shipbuilding side.
If this was a straightforward Bill not to privatise in any way, new clause 1 would probably be acceptable. But the right hon. Gentleman is missing the point. This is a partial privatisation Bill. New clause 1 certainly involves
corporate policies and plans regarding the carrying out of its activities in the most efficient manner
but his idea of "the most efficient manner" would not necessarily be mine.

Mr. Don Dixon: I wish to confine my remarks to subsection (2) of the new clause, which deals with industrial relations. I do so because, if new clause 1 is not accepted, there will be no provision in the Bill to deal with industrial relations in the shipbuilding industry.
I agree with the hon. Member for Southampton, Test (Mr. Hill) that, at present, the workers in the shipbuilding industry are demoralised. The Bill revokes section 5(2) of the Aircraft and Shipbuilding Industries Act 1977, which gives British Shipbuilders powers to promote industrial democracy. I do not know whether the Government are


interested in industrial relations, but having heard the statement of the Secretary of State for the Environment about the water dispute and having witnessed the mess he made by interfering in that industry, I should have thought he would have some concern for industrial relations and an interest in working with the people in the industry.
To give some idea of the improvements in industrial relations since vesting day in 1977, when the British Shipbuilding industry was nationalised, one must go back to when the industry was in private hands. When the chairman of British Shipbuilders was first appointed, he said:
We are breaking down old-fashioned and deep-rooted attitudes and substituting informed, active and hard-headed involvement with participation.
That is an important statement. The chairman of British Shipbuilders recognised the poor state of industrial relations that prevailed when the industry was in private hands.
I have worked in the industry all my life as, indeed, have some of my colleagues in the Chamber. When one considers the conditions that prevailed before nationalisation one can understand the concern of the workers in the shipbuilding industry if a provision about industrial relations is not included in the Bill. The Aircraft and Shipbuilding Industries Act led workers in the industry to believe that they had industrial democracy, for which they accepted the loss of 25,000 jobs, the closure of nine shipyards, the closure of ship repair yards and engine works. They did so because they thought they had some say in what was happening in the industry.
The Bill, which we are told is an enabling Bill, means that the workers have been conned since 1975. Had they not had so-called industrial democracy, they would have put up a fight against losing 25,000 jobs, with not one compulsory redundancy to date.
I worked in the shipbuilding industry before nationalisation. In one of the shipyards that I worked in we put lugs on plates so that the welders could weld the plates together. A lug was a small piece of metal. The welders' rods were inches from the shipyard workers' fingers. The employers refused to supply gloves for the workers. Every day we finished up with sceptic burns on our hands because of the attitude of the owners of the industry.
Before nationalisation the whole industry was fraught with demarcation disputes. I recall the famous one in Liverpool, when a six-month strike took place because the joiners claimed that they should be boring the holes on small pieces of plate instead of the drillers. One should consider such things when one talks about the British shipbuilding industry.
Before nationalisation there were virtually no industrial relations. The management was the worst in the country. There was no consultation on any innovations in the yards. That was one of the reasons for the hostile reaction from the workers. In 1977 we thought that Utopia had come and that the British shipyard workers at last would have some say in the industry in which they were investing their lives.
I recall the strike at Hawthorn Leslie, when the management stopped the greasing allowance that the shipwrights got for going underneath the ship and greasing the ways so that the ship could be launched. We got the princely sum of 7s. 6d., which would be 37½p today, for going under the ship and greasing it. We put our hands in

big barrels of grease and slapped it on the ways before the launch of the ship. At the same time as it stopped that allowance the management had a champagne party for the guests who were invited for the launching of the ship. Such conditions used to prevail in the industry.
There was no pension scheme. Nothing happened if someone was killed or died at work. The widow or any other dependants had to rely on the workmen having a whip round. Those were the conditions before nationalisation.
The hon. Member for Southampton, Test said that the morale of the British shipyard workers was low. Something about industrial relations should be written into the Bill. Section 5(2) of the 1977 Act, in which industrial democracy was supposed to be promoted, has been revoked. Therefore, there will be no co-operation by people who work in the industry.
Before 1977 there were 168 bargaining units in the shipbuilding industry. These have been reduced to two—one for the manual workers and one for staff. That gives one an idea of what happens when one gets the co-operation of the workers. If the Government want confrontation, the best way to do so is to ignore industrial relations. As I said in Committee, if one took all the directors and put them on a luxury yacht, filled it with caviar and red and white wine and sent it to the Mediterranean, ships would still be built because they are built by the workers and not by the directors. It is about time the Government realised that.
One of our first major achievements was to get the 168 bargaining units down to two. Demarcation disputes are vitually eliminated now. There is an amalgamation of trades. At one time there were various separate trades, such as the burners, the caulkers, the shipwrights, the platers, the joiners, the painters and the French polishers. Most of them have been amalgamated and there is no demarcation. The industry wants some assistance, not the Bill.
5.15 pm
I shall not take long, because my right hon. Friend the Member for Sunderland, North (Mr. Willey) has explained the reasons for the corporate plan. I want to emphasise my point about industrial relations. If the Government ignore industrial relations, there will be a confrontation with the industry at the worst possible time. I hope that the Minister will accept the new clause. Without it there is nothing in the Bill about industrial relations. That has been completely eliminated by the revocation of section 5(2) of the 1977 Act. I hope that the Minister will accept the new clause.

Dr. J. Dickson Mabon: I support the new clause, which the right hon. Member for Sunderland, North (Mr. Willey) moved with considerable force.
The 1977 Act has not worked out as its authors intended. New clause 1(4) refers to the withdrawal of section 7 of that Act, which was about having an annual corporate planning policy. That is sensible. It has proved impossible, in view of the immense problems facing the industry, to have an annual corporate policy. It is difficult to have a corporate policy at all. However, that does not mean that there should not be an effort by British Shipbuilders to have a corporate policy, which, as the hon. Member for Yarrow—

Mr. Dixon: Jarrow.

Mr. R. C. Mitchell: A Freudian slip.

Dr. Mabon: I agree that there is a considerable difference.

Mr. Dixon: The right hon. Gentleman will be saying "Harrow" next.

Dr. Mabon: I apologise to the hon. Gentleman. I have the 'flu and cannot speak very clearly. I never went to Harrow, but to a state school.
Section 7, in its attempt to get an annual corporate policy, was a mistake because such a policy has been difficult to secure. I have been associated with the industry all my life. My father was also associated with it. The workers wanted industrial democracy in its real and old-fashioned sense as a result of nationalisation. It is one of the few industries in which it has been resented and resisted by even the most progressive employers for many years. There were a few exceptions, but on the whole the industry was riddled with prejudice against industrial participation by the workers.
The 1977 Act was important. It is therefore sensible that, if we are amending the original Act with such substantial amendments, we should mention industrial relations and democracy, as the hon. Member for Jarrow (Mr. Dixon) said.
I do not see the objection to the clause. No doubt the Minister will try to make a case. I hoped that he would speak immediately after the amendment had been moved so that we could hear an acceptance by the Front Bench, in principle if not in text, of the new clause. The argument of the hon. Member for Southampton, Test (Mr. Hill) was awfully doubtful, even downright silly, when he said that the new clause could not be incorporated because elements of privatisation could come into it. I do not agree with elements of privatisation but the Bill does not say that there will be any. It is simply an enabling measure. The meaning of new clause 1 would not be affected by privatisation. Privatisation would not upset the balance. I doubt whether the Minister will claim that the Bill will denationalise the larger part of British Shipbuilders. A fraction of the industry may be privatised. If the Government intend to denationalise the industry, they have not said so in the House.

Dr. John Cunningham: I am grateful to the right hon. Gentleman for giving way. Perhaps he will reflect on what he has just said. Surely the warship building yards, the profitable part, is the largest part of what is likely to be left of the industry because of its decline, and that is exactly the bit that the Government want to privatise.

Dr. Mabon: I hope that that is not so. The Government do not confess to it. Nevertheless, I am willing to accept the hon. Gentleman's postulation that it might be so. The fact remains, however, that a large part of the industry will continue to produce ships of peace rather than ships of defence or war. In those circumstances, new clause 1 still stands. I am simply rebutting the argument of the hon. Member for Southampton, Test who said that new clause 1 cannot be incorporated because it prevents privatisation. It does nothing of the kind. The new clause can stand, even within the Government's compass and within the view of the hon. Member for Whitehaven (Dr. Cunningham), who argues that the bulk of the warship building side will be denationalised.

Mr. Hill: When the chairman of British Shipbuilders gave evidence to the Select Committee he said that a corporate plan was largely out of date and that he was now mainly interested in cash limits and the intervention fund. He said that they were crucial to British Shipbuilders. In any form of selling the assets, the corporate plan that is suggested in new clause 1 would have to be incorporated in an agreement to sell those assets. There is no chance of a private firm that buys up an asset wanting to be tied to an annual corporate plan.

Dr. Mabon: I am not advocating an annual corporate plan. Events have proved it to be nonsense. Nevertheless, I should be extremely surprised if a man such as Robert Atkinson opposes the idea of a corporate plan. I am not asking Ministers to say whether the chairman agrees with the new clause 1. That would be quite improper. Nevertheless, I should be surprised if he disagrees with it. It is sensible for any chairman of any corporation, whether private or public, to have a corporate plan, albeit not annually. Moreover, it is important for such a chairman to have a corporate plan that involves consultation with unions and, more directly, with employees.
We are debating the submission of such a plan to Parliament, not an annual submission. This admirable new clause would provide for a submission being made at some time when it has been agreed within the industry. I should be surprised if the Minister took refuge in the argument that was loyally but mistakenly advanced by the hon. Member for Southampton, Test. That is a bad argument. There is a good argument for having a corporate plan. Clause 2 deals with improving productivity. Is that not the theme of many of the chairman's speeches to many groups of shipbuilders? That is certainly true of the lower Clyde. The chairman wants improved productivity, but he must work out how to achieve it. To do that he must have the co-operation not merely of the unions formally, but of the men who are directly involved. No one opposes improved productivity. The argument is about how one achieves it. The hon. Member for Jarrow rightly mentioned industrial relations. The Minister might want to suggest to the chairman that other matters might be included in the corporate plan.
Decentralising management is another issue. I remember earlier discussions on the Bill when some of us felt that decentralising British Shipbuilders could be on a estuarial or riparian basis rather than the present functional division between offshore, commercial and warship sections. It is not true to argue that British Shipbuilders is a decentralised nationalised industry. It has become, alas, highly centralised. I strongly regret that. That is why I welcome new clause 1. It would help towards decentralising management. Nowhere is that more true than on the lower Clyde. It is to our regret that we do not have the element of decentralisation that we used to have in the early days of nationalisation.
New clause 1 is not cosmetic or merely a genuflection to industrial relations and the rest. It is sensible and tries to build on the earlier legislation. Not all Governments get things right and not all Acts are perfect. The annual corporate plan was a mistake. I confess that readily. Nevertheless, that does not mean that we should now throw out the baby with the bathwater. Moreover, I do not believe that the extract of the evidence of the chairman of British Shipbuilders to the Select Committee, to which the hon. Member for Southampton, Test referred, is


representative of all of the chairman's evidence. I do not accept that he is against a corporate plan. If he is, what does it matter? We shall have to overrule him. We shall have to say "We are sorry, chairman. We insist on having a corporate plan."
I cannot see the objections to new clause 1. I hope that Ministers will address themselves to that. Where are the objections? I would have preferred to make my speech later to see what arguments Ministers deploy. My right hon. and hon. Friends and I wholeheartedly agree with the right hon. Member for Sunderland, North. I hope that the Government will not regard the issue in a partisan way. A large part of British Shipbuilders will remain in public hands. It deserves to have a corporate plan and to have this type of description of it in statute so that Parliament will be consulted. I earnestly beg the Government to incorporate this new clause.

Mr. Anthony Nelson: I greatly welcome the principal objective of the bill, which is to privatise British Shipbuilders in part or its subsidiaries. However, I share the views of those hon. Members who have already spoken in that neither the long title of the Bill nor its provisions exclude some aspects of new clause 1.
The long title of the Bill which is to
Make further provision with respect to the functions and activities of British Shipbuilders
should encompass exactly the objectives to which new clause 1 refers. Moreover, the Bill changes the law and refers to several prohibitions that relate to British Shipbuilders which are not solely concerned with privatisation. Clause 2(1) confers on British Shipbuilders the duty to exercise its powers in the most efficient manner. That is a proper responsibility and, in itself, has nothing to do with privatisation. The new section 4A(1) is a prime example of the way in which lawyers and draftsmen have a field day in tautology when they draft Bills. It says:
It shall be the duty of British Shipbuilders so to exercise its powers as to secure that the carrying on of the activities that have fallen to be carried on under its ultimate control is organised, so far as regards the direction thereof, in the most efficient manner.
Why does it not simply say "It shall be the duty of British Shipbuilders to act efficiently" because that is what the subsection proposes?
5.30 pm
In sympathy with the right hon. Member for Sunderland, North (Mr. Willey) and with my hon. Friend the Member for Southampton, Test (Mr. Hill), may I say that we should review critically the provision of section 7 of the Aircraft and Shipbuilding Industries Act 1977 which imposes a statutory duty on British Shipbuilders to produce an annual corporate plan. With the benefit of hindsight, that has been not only an onerous responsibility but of dubious benefit to British Shipbuilders, its employees and Parliament. I suggest to my hon. Friends the Under-Secretary of State and the Minister of State, who have enormous personal experience of industry and companies, that few major companies or corporations must produce both an annual report and a complete new annual corporate plan, which requires extensive negotiation, agreement in committees and consultation, rightly, with trade unions and other interested parties. That is an onerous and expensive duty that could reasonably be removed.
I have not scoured the Official Report of the Standing Committee to ascertain whether an amendment to that end was moved. When my hon. Friend replies, I hope that he will direct his attention sympathetically to those points and to the need that many people accept for more discretion to be given to British Shipbuilders to decide when it is appropriate for it to come forward with a new corporate plan. Even in the absence of that legislative requirement under section 7 of the 1977 Act, British Shipbuilders must act efficiently and achieve commercial targets. If it decides that that is its overriding objective and that a new corporate plan is necessary, it is responsible and commercial enough to produce such a plan.
The new clause is deficient and is in the interests of neither British Shipbuilders nor the House. However, some parts of the new clause are fairly responsible. Few hon. Members would contend that improvements in productivity, proper consideration of the decentralisation of management and better industrial relations were undesirable. However, the new clause also seeks to repeal section 7 of the previous Act. Therefore, we must consider the provisions of section 7 that worked well but that are not included in the new clause. There are many such provisions, and section 7 places a responsibility on the corporation to include in its corporate plan specific considerations relating to matters such as capital investment, research and development, employment of workers, forecasts of income and expenditure and profit and loss and a variety of other matters.
The right hon. Member of Sunderland, North may argue that such provisions would be included in the subsection of his new clause that states
and such other matters as the Secretary of State may specify in writing.
That is not good enough. I should be reassured if the commercial criteria that British Shipbuilders must include in its corporate plan were laid down in law and referred to the financial objectives contained in section 7 but omitted in the new clause.

Mr. Willey: I do not disagree with the hon. Gentleman. My point was that his colleagues criticised those provisions in Committee. The Government must advise us about this matter. They have had experience during the past few years of running annual corporate plans—not very successfully—and they should decide about any revisions. That is why I made no revisions.

Mr. Nelson: I am grateful to the right hon. Gentleman. Perhaps there is little difference between us.
I hope that my hon. Friend's reply will be satisfactory and that the House need not divide on the new clause. If we were to accept the new clause, well-intentioned though it is, it would be deficient because it would exclude from the duties laid on British Shipbuilders several important financial and commercial criteria that must be included in its corporate plan. A corporate plan that does not, above all, uphold the objectives of making a return on capital and making a profit will not be in the interests of either the Government or the employees of British Shipbuilders.
British Shipbuilders is currently faced with a major pay claim, and the Amalgamated Union of Engineering Workers is insisting that it will be both militant and intransigent in pressing its claim. During a period of keen world competitiveness, we must remind British Shipbuilders statutorily and in public that we look to it and its employees to respond to the considerable sums of


public subvention that have been made available and to fulfil some of the worthy objectives of section 7 of the previous Act.

Dr. John Cunningham: That is all very well, but does not the hon. Gentleman recognise that each year for the past four years the unions in the shipbuilding industry have accepted a wage settlement below the rate of inflation? They have agreed to yard closures, job losses and redundancies because they were promised that the industry would become leaner and fitter and would survive. But the result, after four years, is that the unions have been told that they must accept more closures and redundancies and less Government support. Does the hon. Gentleman believe that they will accept that?

Mr. Nelson: The unions may have to accept it, deeply regrettable though it may be. I share with the hon. Gentleman any tribute paid to British Shipbuilders' workers, who have made sacrifices in recent years. The changes in that industry, as in other major industries such as steel, have been traumatic on both a coporate and a personal scale. But, as the hon. Gentleman rightly says, the purpose is to enable British Shipbuilders to survive and to create a more competitive national corporation so that orders, such as the CEGB order that we discussed last week, are not lost as readily as they are. It is not enough to say that we, as trustees of the public purse, should pay ever-increasing sums of public money in financial support and should increase the borrowing powers of such national corporations without reminding those concerned in the industry that they must play their part. By and large, they accept that responsibility, but, if some recent union statements are to be believed, the pay claim—if settled in full—would greatly damage the corporation. Everyone would regret that, most of all those in the industry, and if the claim is settled in full a difficult world position would become even more difficult.
It would be unwise for the House to accept the new clause, because it would be a prescription for unprofitable coporate plans. The criteria in the new clause, worthy though they are, exclude some important criteria contained in the previous legislation. Section 7 may be deficient in its requirement for annual corporate reports. It is especially deficient because section 18 of the 1977 Act states that British Shipbuilders should provide the Secretary of State with an annual report. Therefore, the corporation must produce not only an annual report but a corporate plan. I believe that a corporate plan is superfluous.
I am sure that the Minister will respond sympathetically to what has been said. With those cautionary words, I urge my hon. Friends to view with some scepticism whether the provisions of the new clause would be to the benefit of British Shipbuilders and whether in fact they exclude a number of other important criteria.

Mr. R. McTaggart: I should like to believe that debates on this new clause and on other new clauses and amendments during the Bill's passage had made everyone aware of the need for a strong shipbuilding capacity to provide for the future needs of this country. Shipbuilding is of vital importance to Great Britain as an island. Its success or failure will have a tremendous impact on the United Kingdom economy. That impact will be felt whether shipbuilding is in private or public hands. It is, therefore, imperative, in the nation's interest, that the Bill

should contain provisions to ensure that British Shipbuilders operates as efficiently as possible and strives to lead the field in industrial relations.
Subsection (1) of the new clause provides:
It shall be the duty of British Shipbuilders, after consulting any relevant trade union, to formulate from time to time when it considers appropriate, or the Secretary of State so requires, corporate policies and plans regarding the carrying out of its activities in the most efficient manner.
Several advances have been made since the formation of British Shipbuilders in 1977. The work force now has specific agreements on flexibility. I remember, from working in the industry, the old demarcation rules which my hon. Friend the Member for Jarrow (Mr. Dixon) mentioned. I remember the strikes that those demarcation rules caused and the trouble that then ensued. We did not just have different wage rates among different trades; we had different wage rates within trades. It caused a great deal of jealousy and back-biting and brought out the worst in the workers.
Since vesting day, British Shipbuilders has had a national procedure for settling disputes. We have trimmed 170 different wage agreements negotiated annually to two wage agreements which now have a common pay anniversary in the industry throughout the country. There have also been casualties.
I should like to pay tribute to the management of British Shipbuilders and to the trade union negotiators who have taken part in the talks throughout that period. The loss of 25,000 jobs in relative calm since vesting day is no mean feat, especially when unemployment rages at about 4 million. About 12 shipyards have closed since vesting day. They were previously building the merchant ships which carried abroad the cargoes needed to help this country's balance of payments.
We cannot underestimate the agreements reached by those negotiators during that period. However, the work force still has deep-rooted suspicions, because all too often in the past it has seen management techniques which resulted in agreements going to the wall once the work force was seen to have conceded something. I hope that every Member of the Committee and the House will make it his duty to allay the workers' fears and prove that the House has a genuine desire for a strong and thriving shipbuilding industry.
Subsection (2) of the new clause states:
In making their formulation, British Shipbuilders will have full regard to improving productivity, decentralising management and operational centres, industrial relations and such other matters as the Secretary of Sate may specify in writing.
I believe that that provision should be welcomed. It is a positive and just step. Surely no one can be under any illusion that the loss of 25,000 jobs, the closure of 12 yards—to ensure the industry's survival and the maintenance of a shipbuilding capacity in this country—and the putting forward of legislation which does not just split the corporation, but takes away the need for British Shipbuilders to promote industrial democracy, will not cause bitterness. The old suspicions and distrust will be felt.
5.45 pm
I may well be naive. The hon. Member for Southampton, Test (Mr. Hill) stated that some people have said that the Bill is about the introduction of private capital and others have said that it is about the hiving-off of the warship building division into private hands. If the industry is to be successful, presumably the new owners


will require greater efficiency from the work force. They will want even more productivity agreements, and they will be wanting ships delivered more quickly in order to become more competitive. I do not see how that can be achieved if we take away from the work force the safety net of the need to promote industrial democracy and say to the workers and trade union officials, who may be thought to have been stabbed in the back, "We want your co-operation for further job losses so that the private sector can be made more profitable." I do not believe that the trade unions would agree to that. It is a recipe for confrontation.
I feel that if the Bill is to succeed in allowing privatisation, it should contain that part of the new clause relating to industrial relations. I strongly urge every hon. Member, particularly Conservative Members, to support the new clause.

Mr. W. E. Garrett: The hon. Member for Chichester (Mr. Nelson) was probably right in his criticism of the new clause when he said that it did not match up to what was needed. However, it is not beyond the wit of the Government, even at this stage in the Bill's progress, to formulate words that would incorporate the principles so ably enumerated by my right hon. Friend the Member for Sunderland, North (Mr. Willey) when he moved the new clause. Those of us who have sat in on the rather lengthy Committee proceedings are well aware that we never discussed industrial relations because there was no clause covering them. We were well aware that the principal object of the Bill was to allow the Government, when they wish, to privatise certain sections of British Shipbuilders.
If the new clause is accepted it would allow at some time, a corporate strategy for the industry, whether private or public. The House should heed the warnings given by my hon. Friend the Member for Jarrow (Mr. Dixon), who has an intimate knowledge of the industry in which he worked for so many years. Those of us on the Committee were aware of his expertise on shipbuilding and the industries associated with it.
I have lived most of my life on Tyneside, and I represent a constituency where most of British Shipbuilders' employees work. It is true that morale is at a low ebb, for a variety of reasons. If it was felt that privatisation would mean a lessening of the structure of industrial relations, morale would sink further still. Many in the House will remember the appalling industrial relations that used to exist in the industry. Many of us have sat back and read media criticisms of trade unionists, whom they called Luddites. Had they known the industry at all, they would have realised that the real Luddites were the management. But two wrongs do not make a right. We have passed that stage, and it is an unpleasant factor in the industrial history of Britain.
Since the shipbuilding corporation was created, it has been an undeniable fact that industrial relations have improved beyond belief, and beyond anything that I dreamt of when I was an active member of the Amalgamated Union of Engineering Workers on Tyneside. I fear that if the Government do not make a statement about future industrial relations as they will be affected by their policy on privatisation we could heap up

more trouble for ourselves. Neither the public nor the private sector will gain any benefit from that. Certainly the workers will not.
The Under-Secretary of State should take note of some of the sincere advice that has been offered in the debate. I support the new clause, but am prepared to consider carefully any similar Government initiative. It is not beyond the power of the Government to insert something into this short Bill to meet the deep concern that has been expressed in the House today.

Mr. R. C. Mitchell: Both the hon. Member for Southampton, Test (Mr. Hill) and the hon. Member for Chichester (Mr. Nelson) welcomed the new clause in principle, but ingeniously found reasons why they could not vote in favour of it. It is a good clause, and I shall invite my hon. Friends to vote for it.
As I said on Second Reading, the Bill is basically an enabling measure. It gives a tremendous amount of power to the Minister, whoever he may be. Hon. Members wo served on the Committee will remember that we tried to reduce that power, which enables the Minister to instruct British Shipbuilders to do many things, such as to sell the warship yards and so on. We did not succeed. The new clause provides that British Shipbuilders should produce a corporate policy, which should be laid before each House of Parliament. That is one more opportunity for Parliament to exert some control over the Executive's actions at any given time.
We cannot have a corporate plan for shipbuilding in isolation. We must recognise that shipbuilding, shipping and defence are interlinked. If there is no demand for ships, there will be no demand for shipbuilding. As we realised during the Falklands crisis, the merchant navy is important as part of our defence forces. We must press the Government for a maritime policy covering all the aspects to which I referred.
Everyone will agree that productivity has improved in the shipbuilding industry, especially during the years since nationalisation. But there is still some way to go, and we have not yet reached the ultimate in productivity in the shipyards. There is a need for further, continuous discussion between management and unions.
My right hon. Friend the Member for Greenock and Port Glasgow (Dr. Mabon) said that one of his disappointments since nationalisation has been the centralised control of British Shipbuilders. When the nationalisation Bill passed through the House, under the auspices of the right hon. Member for Manchester, Ardwick (Mr. Kaufman) I said that we did not want a centralised body that made decisions and then transmitted them to the various yards. I fear that British Shipbuilders has become too centralised. It does not allow enough initiative to local yard managers for local decision making. I hope that that will be reversed during the next few years.
Industrial relations have also improved tremendously—since nationalisation. Before that, they were in an appalling state. But again, we still have a long way to go. There are still too many trade unions negotiating in that area. There are about 16 now, whereas previously they numbered 27, so we have made some progress. We must take the next step and move away from direct confrontation to a system where those who work in the shipyards play a part in the decision-making process. Most people believe that to be a part of industrial democracy. It is not simply collective bargaining—the


men working in the yard have a part to play in decision-making. That is not a new concept in the shipbuilding industry. It was successfully tried at Fairfields many years ago. We must get away from the "we-they" attitude and recognise that we are all "us", and that both sides have the same object in mind, which is to maintain a profitable shipbuilding industry.
If the Government follow their present economic policies, and if the world recession continues, there will be a danger—especially in civilian shipbuilding—that we shall have no shipbuilding industry at all. So there is some urgency in the matter. I hope that, as a first step, the Government will accept the new clause. I have not heard any legitimate reason for opposing it. If the Government cannot accept its wording, I hope that they will introduce something similar.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): I have a great deal of sympathy with the general intentions expressed this afternoon by the right hon. Member for Sunderland, North (Mr. Willey) and represented in the new clause. The Bill, as amended in Committee, reflects the Government's positive response to many of the arguments put before the House this afternoon, including the plea in the last few words spoken by the hon. Member for Southampton, Itchen (Mr. Mitchell).
The issues were discussed in Committee when we dealt with the part of the Bill that repeals section 5 of the 1977 Act. The new clause covers much the same ground as section 5, and, for the same reason as I supported the repeal of section 5, I believe that we should not accept the new clause.
6 pm
I was surprised by the right hon. Gentleman's suggestion that it was better for a corporate plan, or something of that nature, to be produced from time to time rather than annually. I agree that the corporate plan must be relevant, alive and up to date, but it must also be timely, and it needs the discipline provided by an annual framework. We entirely accept the principle of the annual corporate plan and the information that it presents to the Government.
I am not opposed to regular management reviews, the promotion of industrial democracy, the decentralisation of operations, the improvement of productivity, and so on. Those matters are all very important and should be kept constantly under review by British Shipbuilders, and the corporate plan is the right and appropriate vehicle for that purpose. Our objection to the new clause is simply that the matters described in it either should be the natural concern of the management of a commercial organisation, to which statutory exhortation adds nothing, or covered elsewhere in the legislation.
In effect, with some differences more of detail than of substance, the right hon. Gentleman's new clause reconstitutes section 5 which we took out of the legislation and disposes of section 7 which is essentially the one providing the corporate plan. As we said in Committee, section 5 has not been used by British Shipbuilders since 1978. The power of British Shipbuilders to submit an occasional report was used in 1978 for the first and only time. The practice of the management of that nationalised industry therefore suggests that management itself prefers

the vehicle of the corporate plan and finds it sufficient for its purposes, rather than the occasional submission of a plan as is envisaged in the new clause.

Mr. R. C. Mitchell: Will the hon. Gentleman tell me where else in the legislation provision is made for the corporate plan to be laid before Parliament?

Mr. Fletcher: I shall take up that point in due course.
It is important to note that section 7 of the 1977 Act is not repealed by the Bill. Section 7 requires British Shipbuilders to produce art annual corporate plan and to consult the trade unions before doing so. I emphasise that fact for the benefit of the hon. Member for Jarrow (Mr. Dixon), who has suggested today, as he did in Committee, that the corporate plan does not make sufficient allowance for the trade union interest to be taken into account. He prefers the section 5 solution which, as I have said, was used only once to the regular annual corporate plan as under section 7. I remind the hon. Gentleman that section 7 provides:
It shall be the duty of each Corporation, after consulting any relevant trade union, to formulate in each year
and so on.
I should point out to my hon. Friend the Member for Chichester (Mr. Nelson), with whom I disagree about the way in which the private sector might deal with this, that section 7 lays down the kind of basic information expected from a nationalised industry. I suggest that most private companies, however they may describe the process, perhaps on a five-year rolling basis or in some other form, will consider the matters set out in section 7—

"(a) capital investment,
(b) research and development,
(c) employment of persons,
(d) forecasts of income and expenditure on profit and loss account"

and other essential matters.

Mr. Nelson: There is no disagreement between us about the contents of a corporate plan, but only about the timing and whether it would be every year.

Mr. Fletcher: I suggest that most businesses do this every year, however they describe the operation. Indeed, I believe that, if anything, they would probably do it more frequently. There is nothing to prevent BS from making more frequent use of the corporate plan, or amending it during the year as circumstances change and as management considers necessary.

Mr. Dixon: The Minister said that section 5 had not been invoked since 1978. Subsection (2) of that section instructs BS
to promote industrial democracy in its undertakings".
If that has not been invoked, the men in the industry have been conned since 1977. It was because they believed that they had industrial democracy that they accepted the 25,000 redundancies, the loss of the shipyards and the drop from third to 19th in the wages league. They accepted all that because they believed that BS was bound by section 5. The Minister is therefore saying that the workers have been conned.

Mr. Fletcher: I do not think that there is any question of that. All the hon. Gentleman's references to industrial relations in BS have not stemmed from section 5. My point was that if section 5 was so important it would have been used more frequently since the nationalised industry was established and not just in 1978.
The first sentence of section 7 requires that the trade unions be consulted not just about industrial relations but about a whole series of matters which lie at the heart of the industry's planning and of consideration by the board of BS. I believe that it is far more important for the workers to be consulted about the corporate plan, with all the consequences that might flow from decisions surrounding that plan, than to have some attractively worded provision with the phrase "industrial democracy" painted all over it which may ultimately be far less meaningful than the presentation of the corporate plan and consultation with the trade unions about it.

Mr. Hill: The Bill will naturally enable BS to set up subsidiary companies, which may or may not then be sold to the private sector. Will it be a condition of sale that the arrangement in section 7 be carried through in the conveyancing of the contract of sale?

Mr. Fletcher: I think that that would depend entirely on the situation surrounding the sale. A prospective purchaser might wish to carry forward the best practices of BS in industrial relations. I doubt whether that would be laid down in a contract of sale, but I suppose that it is not impossible. The important thing is that this part of the legislation would not apply to a part of BS which was privatised and in effect changed ownership so that it was no longer a nationalised industry and thus no longer subject to the terms of the legislation.
The new clause suggests that the corporate policy or plan shold be concerned with the efficient manner in which the activities of the corporation should be carried out. British Shipbuilders will have a duty under the new section 4A(1), to be organised
in the most efficient manner".
Any commercial organisation that is concerned about its financial results must keep that under frequent review.
The new clause is also concerned with the decentralisation of management and of operational centres. I am also in favour of decentralisation to profit centres. British Shipbuilders is organised in a decentralised fashion. [Interruption.] I hear the groans. I have sympathy with them in the sense that the problem arises about order intake and the allocation of orders. That is a prime test of decentralisation in shipbuilding, steel or any other nationalised industry. That is a hurdle that nationalised industries are unable to get over, partly because of political interference across the spectrum of politics in the House. As long as an industry is nationalised, Members of Parliament and others—I say nothing of Ministers or former Ministers—will feel that they have the right to exercise or to try to exercise some influence over where orders are placed. That is a serious criticism of nationalisation and not of the structure of British Shipbuilders. Given its obvious inhibitions, I entirely agree that British Shipbuilders does everything possible to operate in a decentralised manner. There are ways in which that can be measured.
The head office and central services of British Shipbuilders employ only a few hundred people compared with the 64,000 employed in the separate and publicly accountable subsidiaries. That degree of decentralisation may be preserved. Under the new section 4A(2), the

Secretary of State's consent will be required before British Shipbuilders can make any substantial change in its organisation.
I say to the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) that, if necessary, the Secretary of State could also use his powers under section 7 to specify decentralisation as a matter to be considered in the annual corporate plan.

Dr. Mabon: The Minister has pressed hon. Members on the argument of quantitative decentralisation, hence his quoting of figures at this centre and that. However, there is also qualitative decentralisation, which involves the question of where decisions are made. That is the criticism.

Mr. Fletcher: That is more a criticism of nationalisation than of the organisation and structure. [Interruption.] It is; because Ministers are inevitably deeply involved in nationalised industries. That is also relevant to the point that I made earlier about the allocation of orders.

Sir David Price: Does my hon. Friend agree that the real test of decentralisation, whether in a privately or publicly run organisation, is how much of the profit made by a profit centre within the group can remain within that profit centre and how much of that profit has to go to head office?
The dilemma facing the House is that it wants the profitable yards to subsidise the unprofitable yards, yet at the same time it is talking about decentralisation. If there is real decentralisation in terms of profit centres, I do not understand how there can be both.

Mr. Fletcher: I agree entirely with my hon. Friend. Several tests can be applied. That is one which is extremely important.
An aspect of the new clause with which I am less sympathetic is that any plan produced under the new clause would have to be laid before Parliament. That is fine, sounds great and is, perhaps, as it should be. However, there must be a safeguard to protect not just the national interest, which could be prejudiced by the publication of sensitive information, but the commercial interests of the corporation. From what he said this evening and from the comments he made when the matter was discussed in Committee I have no doubt that the right hon. Member for Sunderland, North recognises that. It is not in the best interest of British Shipbuilders, leaving aside the national interest, that such an important document, full of sensitive information, and of great interest to competitors, should be laid before the House and so become a public document.

Mr. R. C. Mitchell: Bearing in mind the leaks that have recently occurred from Ministries, should the corporate plan be laid before the Minister?

Mr. Fletcher: Fortunately, the privatisation of British Shipbuilders will at least remove that source of information for our competitors. However, one final reason for rejecting the new clause that cannot be ignored by the House is that the Government, as part of their public expenditure planning, set all the nationalised industries a financial framework. It would clearly be inappropriate to do that without first considering the plans and the cost of those plans in respect of each nationalised industry. It is


necessary to have annually a fully considered plan from British Shipbuilders and from other nationalised industries to enable the Government to put together their total public expenditure considerations for the year ahead.
In an industry that is subjected to the frequent changes in market prospects with which British Shipbuilders has to cope, regular reviews of its corporate plan are absolutely essential. Given those points and the other considerations I have mentioned, the Government cannot accept the new clause.

Dr. John Cunningham: I congratulate my right hon. Friend the Member for Sunderland, North (Mr. Willey) on the effective and persuasive way in which he moved the new clause. It is a serious attempt to improve a pretty awful Bill. Even the hon. Members for Chichester (Mr. Nelson) and for Southampton, Test (Mr. Hill), who spoke from the Government Back Benches see some merit in what has been proposed. The new clause has received unanimous support from the opposition Benches, not only from my hon. Friends the Members for Jarrow (Mr. Dixon) and Wallsend (Mr. Garrett) but from the spokesman for the Social Democratic party, the right hon. Member for Greenock and Port Glasgow (Dr. Mabon).
The proposals have had a good reception. That is not surprising since they involve matters that are of considerable importance to the future of our shipbuilding industry as well as to productivity, decentralisation, industrial relations and the corporate plan. There is nothing ideological about what is proposed in the new clause. It is regrettable that the Minister devoted so few of his remarks to the importance of industrial relations in the shipbuilding industry, especially in view of the dramatic improvement that has taken place in that aspect of the industry's affairs since British Shipbuilders was established. That is one of the reasons why the corporation has survived to date, although it has faced serious difficulties.
One of the slight differences of opinion that arose between myself and the right hon. Member for Greenock and Port Glasgow involved the Government's real reasons for not wanting these provisions in the Act. I suspect there is some truth in what the hon. Member for Southampton, Test said, that the Government do not want any impediment to their intentions and proposals to break up, privatise, sell off and close down different aspects of the shipbuilding industry.
We all agree that—as the Minister said—that we should not need to legislate for good management practices. In an ideal world we would accept his assertion, but the real world is rather different, and it has been necessary to legislate for several matters and not least, improvements in industrial relations as well as the development of industrial democracy.
Almost the whole of the private sector of British industry has been running round terrified about proposals from the EC on worker participation and involvement. Far from giving the proposals a wide welcome, all sorts of reasons are being advanced both publicly and behind the scenes as to why they should be rejected. Therefore, we do not accept the Minister's argument in respect of industrial democracy or any other aspect of the new clause.

Mr. Michael Colvin: rose—

Dr. Cunningham: I shall not give way. I want to be brief because there are other amendments to debate, as well as Third Reading.
The fact that the Government do not want these measures to be reintroduced—having taken some of them out of the 1977 Act—reflects a change in attitude about how our industries should be run and managed. As we often said in Committee, no one in British Shipbuilders has asked for such a thing to be done. The Government are on their own in making the changes.
The Minister's speech was in the form: "Oppose gently. Be nice, but say there are good practical reasons why these proposals cannot be incorporated into the Bill." It is a speech that we have all heard many times in the House. It was singularly unconvincing in this instance. In Committee, we tried to improve the Bill by incorporating some of these provisions. We wanted to discuss them again on Report and we shall certainly invite the House to join us in voting for them.

Question put, That the clause be read a Second time:—

The House divided: Ayes 223, Noes 284.

Division No. 77]
[6.22 pm


AYES


Abse, Leo
Dewar, Donald


Adams, Allen
Dixon, Donald


Allaun, Frank
Dormand, Jack


Alton, David
Douglas, Dick


Anderson, Donald
Dubs, Alfred


Archer, Rt Hon Peter
Duffy, A. E. P.


Ashley, Rt Hon Jack
Dunwoody, Hon Mrs G.


Ashton, Joe
Eadie, Alex


Atkinson, N. (H'gey,)
Eastham, Ken


Barnett, Guy (Greenwich)
Edwards, R. (W'hampt'n S E)


Barnett, Rt Hon Joel (H'wd)
Ellis, R. (NE D'bysh're)


Beith, A. J.
Ellis, Tom (Wrexham)


Benn, Rt Hon Tony
English, Michael


Bennett, Andrew (St'kp't N)
Ennals, Rt Hon David


Bidwell, Sydney
Evans, Ioan (Aberdare)


Booth, Rt Hon Albert
Ewing, Harry


Boothroyd, Miss Betty
Faulds, Andrew


Bray, Dr Jeremy
Fitch, Alan


Brocklebank-Fowler, C.
Ford, Ben


Brown, Hugh D. (Provan)
Forrester, John


Brown, R. C. (N'castle W)
Foster, Derek


Brown, Ronald W. (H'ckn'y S)
Foulkes, George


Brown, Ron (E'burgh, Leith)
Fraser, J. (Lamb'th, N'w'd)


Campbell, Ian
Freeson, Rt Hon Reginald


Campbell-Savours, Dale
Freud, Clement


Canavan, Dennis
Garrett, John (Norwich S)


Cant, R. B.
Garrett, W. E. (Wallsend)


Carmichael, Neil
George, Bruce


Carter-Jones, Lewis
Gilbert, Rt Hon Dr John


Cartwright, John
Golding, John


Clark, Dr David (S Shields)
Gourlay, Harry


Clarke.Thomas (C'b'dge, A'rie)
Graham, Ted


Cocks, Rt Hon M. (B'stol S)
Grimond, Rt Hon J.


Cohen, Stanley
Hamilton, James (Bothwell)


Coleman, Donald
Hamilton, W. W. (C'tral Fife)


Concannon, Rt Hon J. D.
Hardy, Peter


Conlan, Bernard
Harrison, Rt Hon Walter


Cook, Robin F.
Hart, Rt Hon Dame Judith


Cox, T. (W'dsw'th, Toot'g)
Hattersley, Rt Hon Roy


Craigen, J. M. (G'gow, M'hill)
Haynes, Frank


Crowther, Stan
Healey, Rt Hon Denis


Cryer, Bob
Heffer, Eric S.


Cunliffe, Lawrence
Hogg, N. (E Dunb't'nshire)


Cunningham, G. (Islington S)
Holland, S. (L'b'th, Vauxh'll)


Cunningham, Dr J. (W'h'n)
Homewood, William


Dalyell, Tam
Hooley, Frank


Davidson, Arthur
Horam, John


Davies, Rt Hon Denzil (L'lli)
Howell, Rt Hon D.


Davis, Clinton (Hackney C)
Hoyle, Douglas


Davis, Terry (B'ham, Stechf'd)
Hughes, Mark (Durham)


Deakins, Eric
Janner, Hon Greville


Dean, Joseph (Leeds West)
Jay, Rt Hon Douglas






Jenkins, Rt Hon Roy (Hillh'd)
Robinson, P. (Belfast E)


John, Brynmor
Rodgers, Rt Hon William


Johnson, James (Hull West)
Rooker, J. W.


Jones, Barry (East Flint)
Roper, John


Jones, Dan (Burnley)
Ross, Ernest (Dundee West)


Kaufman, Rt Hon Gerald
Ross, Stephen (Isle of Wight)


Lambie, David
Sandelson, Neville


Leadbitter, Ted
Sever, John


Leighton, Ronald
Sheerman, Barry


Lestor, Miss Joan
Sheldon, Rt Hon R.


Lewis, Arthur (N'ham NW)
Shore, Rt Hon Peter


Lewis, Ron (Carlisle)
Short, Mrs Renée


Litherland, Robert
Silkin, Rt Hon J. (Deptford)


Lofthouse, Geoffrey
Silkin, Rt Hon S. C. (Dulwich)


Lyon, Alexander (York)
Silverman, Julius


Lyons, Edward (Bradf'd W)
Skinner, Dennis


Mabon, Rt Hon Dr J. Dickson
Smith, Cyril (Rochdale)


McCartney, Hugh
Smith, Rt Hon J. (N Lanark)


McDonald, Dr Oonagh
Soley, Clive


McElhone, Mrs Helen
Spearing, Nigel


McGuire, Michael (Ince)
Spellar, John Francis (B'ham)


McKay, Allen (Penistone)
Spriggs, Leslie


McKelvey, William
Stallard, A. W.


MacKenzie, Rt Hon Gregor
Steel, Rt Hon David


McNamara, Kevin
Stewart, Rt Hon D. (W Isles)


McTaggart, Robert
Stoddart, David


Marks, Kenneth
Stott, Roger


Marshall, D(G'gow S'ton)
Strang, Gavin


Marshall, Dr Edmund (Goole)
Straw, Jack


Marshall, Jim (Leicester S)
Summerskill, Hon Dr Shirley


Martin, M(G'gow S'burn)
Taylor, Mrs Ann (Bolton W)


Mason, Rt Hon Roy
Thomas, Mike (Newcastle E)


Meacher, Michael
Thomas, Dr R. (Carmarthen)


Millan, Rt Hon Bruce
Thorne, Stan (Preston South)


Miller, Dr M. S. (E Kilbride)
Tinn, James


Mitchell, Austin (Grimsby)
Torney, Tom


Mitchell, R. C. (Soton Itchen)
Varley, Rt Hon Eric G.


Morris, Rt Hon A. (W'shawe)
Wainwright, E.(Dearne V)


Morris, Rt Hon C. (O'shaw)
Wainwright, H. (Colne V)


Mulley, Rt Hon Frederick
Walker, Rt Hon H. (D'caster)


Newens, Stanley
Warden, Gareth


Oakes, Rt Hon Gordon
Watkins, David


O'Halloran, Michael
Wellbeloved, James


O'Neill, Martin
Welsh, Michael


Orme, Rt Hon Stanley
White, Frank R.


Palmer, Arthur
Whitlock, William


Park, George
Wigley, Dafydd


Parker, John
Willey, Rt Hon Frederick


Parry, Robert
Williams, Rt Hon A.(S'sea W)


Pavitt, Laurie
Wilson, Gordon (Dundee E)


Pitt, William Henry
Wilson, Rt Hon Sir H.(H'ton)


Powell, Raymond (Ogmore)
Wilson, William (C'try SE)


Race, Reg
Winnick, David


Radice, Giles
Woodall, Alec


Rees, Rt Hon M (Leeds S)
Woolmer, Kenneth


Richardson, Jo
Wrigglesworth, Ian


Roberts, Albert (Normanton)
Wright, Sheila


Roberts, Allan (Bootle)



Roberts, Ernest (Hackney N)
Tellers for the Ayes:


Roberts, Gwilym (Cannock)
Mr. George Morton and


Robertson, George
Mr. Harry Cowans.


Robinson, G. (Coventry NW)



NOES


Aitken, Jonathan
Benyon, Thomas (A'don)


Alexander, Richard
Benyon, W. (Buckingham)


Alison, Rt Hon Michael
Berry, Hon Anthony


Amery, Rt Hon Julian
Best, Keith


Ancram, Michael
Bevan, David Gilroy


Arnold, Tom
Biffen, Rt Hon John


Aspinwall, Jack
Biggs-Davison, Sir John


Atkins, Rt Hon H.(S'thorne)
Blackburn, John


Atkins, Robert(Preston N)
Blaker, Peter


Atkinson, David (B'm'th,E)
Body, Richard


Baker, Kenneth(St.M'bone)
Bonsor, Sir Nicholas


Baker, Nicholas (N Dorset)
Bottomley, Peter (W'wich W)


Banks, Robert
Bowden, Andrew


Beaumont-Dark, Anthony
Boyson, Dr Rhodes


Bendall, Vivian
Braine, Sir Bernard


Bennett, Sir Frederic (T'bay)
Bright, Graham





Brinton, Tim
Hawkins, Sir Paul


Brittan, Rt. Hon. Leon
Hawksley, Warren


Brooke, Hon Peter
Hayhoe, Barney


Brotherton, Michael
Heddle, John


Brown, Michael(Brigg &amp; Sc'n)
Henderson, Barry


Browne, John (Winchester)
Hicks, Robert


Bruce-Gardyne, John
Higgins, Rt Hon Terence L.


Bryan, Sir Paul
Hill, James


Buchanan-Smith, Rt. Hon. A.
Hogg, Hon Douglas (Gr'th'm)


Buck, Antony
Holland, Philip (Carlton)


Budgen, Nick
Hooson, Tom


Burden, Sir Frederick
Hordern, Peter


Butcher, John
Howe, Rt Hon Sir Geoffrey


Carlisle, John (Luton West)
Howell, Ralph (N Norfolk)


Carlisle, Kenneth (Lincoln)
Hunt, David (Wirral)


Carlisle, Rt Hon M. (R'c'n)
Hunt, John (Ravensbourne)


Chalker, Mrs. Lynda
Hurd, Rt Hon Douglas


Channon, Rt. Hon. Paul
Irvine, Rt Hon Bryant Godman


Chapman, Sydney
Irving, Charles (Cheltenham)


Churchill, W. S.
Jenkin, Rt Hon Patrick


Clark, Sir W. (Croydon S)
Jessel, Toby


Clarke, Kenneth (Rushcliffe)
Johnson Smith, Sir Geoffrey


Cockeram, Eric
Jopling, Rt Hon Michael


Colvin, Michael
Joseph, Rt Hon Sir Keith


Cope, John
Kaberry, Sir Donald


Corrie, John
Kershaw, Sir Anthony


Costain, Sir Albert
Kitson, Sir Timothy


Cranborne, Viscount
Knight, Mrs Jill


Critchley, Julian
Knox, David


Crouch, David
Lamont, Norman


Dickens, Geoffrey
Lang, Ian


Dorrell, Stephen
Langford-Holt, Sir John


Douglas-Hamilton, Lord J.
Latham, Michael


Dover, Denshore
Lawrence, Ivan


du Cann, Rt Hon Edward
Lawson, Rt Hon Nigel


Dunn, Robert (Dartford)
Lee, John


Durant, Tony
Le Marchant, Spencer


Eden, Rt Hon Sir John
Lennox-Boyd, Hon Mark


Edwards, Rt Hon N. (P'broke)
Lester, Jim (Beeston)


Eggar, Tim
Lewis, Sir Kenneth (Rutland)


Elliott, Sir William
Lloyd, Ian (Havant &amp; W'loo)


Emery, Sir Peter
Lloyd, Peter (Fareham)


Eyre, Reginald
Loveridge, John


Fairbairn, Nicholas
Lyell, Nicholas


Fairgrieve, Sir Russell
McCrindle, Robert


Faith, Mrs Sheila
MacKay, John (Argyll)


Farr, John
Macmillan, Rt Hon M.


Fell, Sir Anthony
McNair-Wilson, M. (N'bury)


Finsberg, Geoffrey
McNair-Wilson, P. (New F'st)


Fisher, Sir Nigel
McQuarrie, Albert


Fletcher, A. (Ed'nb'gh N)
Major, John


Fletcher-Cooke, Sir Charles
Marland, Paul


Fookes, Miss Janet
Marlow, Antony


Forman, Nigel
Marshall, Michael (Arundel)


Fowler, Rt Hon Norman
Marten, Rt Hon Neil


Fox, Marcus
Mates, Michael


Fraser, Rt Hon Sir Hugh
Maude, Rt Hon Sir Angus


Fraser, Peter (South Angus)
Mawby, Ray


Fry, Peter
Mawhinney, Dr Brian


Gardiner, George (Reigate)
Maxwell-Hyslop, Robin


Gardner, Sir Edward
Mayhew, Patrick


Garel-Jones, Tristan
Mellor, David


Gilmour, Rt Hon Sir Ian
Meyer, Sir Anthony


Goodhart, Sir Philip
Miller, Hal (B'grove)


Goodlad, Alastair
Mills, Iain (Meriden)


Gorst, John
Mills, Sir Peter (West Devon)


Gow, Ian
Miscampbell, Norman


Gower, Sir Raymond
Mitchell, David (Basingstoke)


Grant, Sir Anthony
Moate, Roger


Gray, Rt Hon Hamish
Monro, Sir Hector


Greenway, Harry
Montgomery, Fergus


Griffiths, B.(B'y St. Edm'ds)
Moore, John


Griffiths, Peter (Portsm'th N)
Morris, M. (N'hampton S)


Grist, Ian
Morrison, Hon C. (Devizes)


Grylls, Michael
Mudd, David


Gummer, John Selwyn
Murphy, Christopher


Hamilton, Hon A.
Myles, David


Hamilton, Michael (Salisbury)
Neale, Gerrard


Hannam, John
Needham, Richard


Haselhurst, Alan
Nelson, Anthony






Neubert, Michael
Stainton, Keith


Nott, Rt Hon Sir John
Stanbrook, Ivor


Onslow, Cranley
Stanley, John


Oppenheim, Rt Hon Mrs S.
Steen, Anthony


Osborn, John
Stevens, Martin


Page, Richard (SW Herts)
Stewart, A.(E Renfrewshire)


Parkinson, Rt Hon Cecil
Stewart, Ian (Hitchin)


Parris, Matthew
Stokes, John


Patten, Christopher (Bath)
Stradling Thomas, J.


Pawsey, James
Taylor, Teddy (S'end E)


Percival, Sir Ian
Tebbit, Rt Hon Norman


Peyton, Rt Hon John
Temple-Morris, Peter


Pink, R. Bonner
Thompson, Donald


Pollock, Alexander
Thorne, Neil (Word South)


Porter, Barry
Thornton, Malcolm


Prentice, Rt Hon Reg
Townend, John (Bridlington)


Price, Sir David (Eastleigh)
Townsend, Cyril D, (B'heath)


Proctor, K. Harvey
Trippier, David


Pym, Rt Hon Francis
van Straubenzee, Sir W.


Rathbone, Tim
Vaughan, Dr Gerard


Rees, Peter (Dover and Deal)
Viggers, Peter


Rees-Davies, W. R.
Waddington, David


Renton, Tim
Wakeham, John


Rhodes James, Robert
Waldegrave, Hon William


Ridley, Hon Nicholas
Walker, B. (Perth)


Ridsdale, Sir Julian
Walker-Smith, Rt Hon Sir D.


Rifkind, Malcolm
Wall, Sir Patrick


Rippon, Rt Hon Geoffrey
Waller, Gary


Roberts, Wyn (Conway)
Walters, Dennis


Rossi, Hugh
Ward, John


Rost, Peter
Warren, Kenneth


Royle, Sir Anthony
Watson, John


Sainsbury, Hon Timothy
Wells, Bowen


St. John-Stevas, Rt Hon N.
Wells, John (Maidstone)


Shaw, Giles (Pudsey)
Wheeler, John


Shaw, Sir Michael (Scarb')
Whitelaw, Rt Hon William


Shelton, William (Streatham)
Whitney, Raymond


Shepherd, Colin (Hereford)
Wickenden, Keith


Shepherd, Richard
Wiggin, Jerry


Silvester, Fred
Wilkinson, John


Sims, Roger
Williams, D.(Montgomery)


Skeet, T. H. H.
Winterton, Nicholas


Smith, Tim (Beaconsfield)
Wolfson, Mark


Speed, Keith
Younger, Rt Hon George


Speller, Tony



Spence, John
Tellers for the Noes:


Spicer, Jim (West Dorset)
Mr. Carol Mather and


Sproat, Iain
Mr. Robert Boscawen.

Question accordingly negatived.

Clause 1

MODIFICATION OF BRITISH SHIPBUILDERS' FUNCTIONS

Mr. R. C. Mitchell: I beg to move amendment No. 1, in page 1, line 21, at end insert:
`and such other activities as may from time to time appear to them to be desirable and which can be carried out within their existing shipyards'.
This is a simple amendment but one that may well be very important, given the present state of the shipbuilding industry and its likely state over the next few years. We all know the position. We are in a world recession and there is no demand for merchant ships. We are facing severe competition, particularly from far eastern yards in Korea and Taiwan. The order books for merchant shipping do not look hopeful. The Government's deflationary policy is making the recession worse, with the result that the outlook for British shipbuilding is worse than it might otherwise have been.
We have the same picture in naval shipbuilding because Government defence cuts will probably reduce the number of naval vessels ordered over the next few years. I hope that the Government will soon decide about the next type

22 frigate and that the order will be placed at Vosper Thornycroft. I understand that the decision will be made shortly.
The position would be no better if some of the more extreme policies advocated by some members of the Labour party were put into operation. If those in the Labour party who believe in a siege economy and massive import controls, which would lead to restrictions on exports, had their way, the result would be disastrous for shipping. The decrease in the amount of goods moving from one country to another would reduce the demand for shipping, and therefore for further shipbuilding.
Clause 1(3) states:
British Shipbuilders shall have power to carry on the following activities, namely— 
(a) the design, development, production, sale, repair and maintenance of ships and slow speed diesel marine engines".
I understand that in a court case one firm is claiming that British Shipbuilders is building engines, which it should not be under current legislation. The amendment would allow British Shipbuilders to extend its activities within its existing shipyards.
About three years ago I visited Lubeck, a north German shipyard which had no orders for ships for the next nine months. It could not get new ship orders but it did not sack all the work force. It got an order for two large mechanical diggers for Libya. Those diggers were being built in the shipyard by the yard's work force. That seemed to be an eminently sensible idea. As I understand it—if I am wrong the Minister will correct me when he replies—if British Shipbuilders wanted to do that it could not do so under the present legislation. It would be outside the permitted range of activities. If there is to be a reduction in demand for shipping, it seems a good idea that the shipyards should turn to other activities. That would be a far better solution than sacking the work force and seeing it dispersed. When the upturn in the economy arrives and the demand for shipping increases, it will be difficult to recover the work force if it has been dispersed.
The amendment provides more flexibility for British Shipbuilders to extend its building activities beyond ships and diesel marine engines. I am not arguing that these activities should involve manufacturing in factories. The amendment refers to activities
which can be carried out within their existing shipyards.
I see no reason why the Minister should oppose the amendment. The greater flexibility that it would provide for British Shipbuilders could be helpful over the next few difficult years.

Mr. Hill: I am pleased to follow the remarks of the hon. Member for Southampton, Itchen (Mr. Mitchell). The hon. Gentleman may have failed to notice that clause 1(3)(d) states that consent for any activity can be given by the Secretary of State. I can understand the hon. Gentleman's anxiety. There are perhpas three forces that have come together. The first is the privatisation of Associated British Ports with a successful 34 times over-subscribed share flotation, which will mean more activities within the Southampton port area.
The second force is the fact that the Chancellor of the Exchequer has set up a policy committee which is examining whether, in the national interest, certain ports and airports should be customs free. I understand from a whisper in the Lobby that the policy committee has come


out with a firm recommendation that this would be in the national interest. We await with great eagerness the Chancellor's statement on Budget day.

Mr. Mike Thomas: I wish to be clear what the hon. Gentleman is saying and to establish its relevance. Is he suggesting that it might be possible for British Shipbuilders, in the ground currently occupied by its shipyards, to establish free ports or duty-free zones?

Mr. Hill: I am not suggesting that. If, however, the hon. Gentleman waits—[Interruption.]. Impatience is always a virtue in a politician but, in this case, it is not merited. The policy committee may persuade the Chancellor to bring forward a policy for free ports.
The third force at work is the Bill now before the House. There is the need for British Shipbuilders to set up subsidiary companies that will eventually be placed either former owners or the market place. Within my area of Southampton, these three policies could come together.
The hon. Member for Itchen has not stated exactly what these other activities might be. He has mentioned two diggers that are being assembled. That would hardly seem sufficient work to obtain the Secretary of State's consent. It seems to me that if there were increased trade in Southampton due to the fact that the port is customs free, ship repairers, under the management of British Shipbuilders, could well turn to other activities. Although my hon. Friend the Minister will say that these matters are adequately covered under clause 1(3)(d), it seems to me that, if this is the case, he should dismiss the amendment. If they are not adequately covered, it appears to me that there would be no harm in adding the amendment to the clause.

Mr. Mike Thomas: The real purpose of the Bill, demonstrated by the hon. Member for Southampton, Test (Mr. Hill), as the cloven hoof came out from under the cloak, is to facilitate the sale of parts of British Shipbuilders to the private sector. This will be possible only by assuring those parts of British Shipbuilders that there will be sufficient public work, principally from the Ministry of Defence, to ensure that they are profitable. Otherwise, no one in his right mind in the private sector would wish to purchase them.
It is interesting that the Government regard the Bill as very much a one-way street. There will be no problem in a private sector company engaged in a myriad of activities—mining of diamonds, mechanical engineering or whatever—purchasing what is currently a part of British Shipbuilders and adding shipbuilding to its range of activities when the Government finally move to breaking up the corporation and selling off the profitable bits. No one will then say that it is ultra vires for a firm currently involved in heavy engineering but not in shipbuilding to become involved in shipbuilding. That will presumably be advanced by the Government, if they are still surviving at that point, as a wonderful reason why this outfit is well fitted to add shipbuilding to its activities.
The amendment proposed by my hon. Friend the Member for Southampton, Itchen (Mr. Mitchell) represents a reasonable and modest extension of the

possibilities for British Shipbuilders and makes it a two-way street. The hon. Member for Southampton, Test has already mentioned the provisions that exist within the Bill. I can, therefore, see no reason why the Government should not make this modest addition.
I speak as an hon. Member who has two shipyards in his constituency. The only achievement of this Government in shipbuilding has been thousands of redundancies. I am glad to see the hon. Member for Wallsend (Mr. Garrett), in whose constituency the other shipyard in the Swan Hunter group is located, nod in agreement. In my case, one of the two shipyards in the constituency has been put on a care and maintenance basis. That is the Government's achievement in shipbuilding on my patch on the Tyne. My hon. Friend the Member for Itchen will forgive me if I say, in this context, that the only part of his speech with which I disagreed was the direction in which any orders for type 22 frigates should go. No doubt all hon. Members have their views on that matter. Hon. Members from both sides of the House representing constituencies on the Clyde and elsewhere will have their views about where the orders should go.
One of the consequences of lack of work is that even with the redundancies already declared and those still to be declared, there are still men and women in British Shipbuilders' yards who have little work to do. One of the more pernicious aspects of the Government's general policy, reflected here in shipbuilding policy, is the way in which they seem to wish to keep men and women idle when there is work to be done. We see roads that are unrepaired, and houses that are unfit to live in and that need bathrooms, insulation, draught-proofing and repairs of various kinds. We see the crumbling fabric of our Health Service, where construction workers could readily be put to work. The Government's policy seems to be based on the premise that it is somehow virtuous to keep people idle when there is work to do.
I come to an example of that policy. If my hon. Friend's amendment were accepted, work could be created in the shipyards for the men and women who already work there, but who currently do not have enough work, and, as a result, have redundancy hanging over their heads. I see no reason why the amendment should be opposed. However seductive the speech that the Minister is about to make, may be, I doubt whether it will convince me that the amendment should not be accepted. If part of the Government's plans is that it will be legitimate for almost anyone who chooses to engage in a bit of shipbuilding and that that will be guaranteed to be profitable by Government orders, but that it will be illegal for British Shipbuilders to become involved in other activities, that will be wholly illogical and wholly improper. I hope, therefore, that the Minister will accept the amendment.

The Minister of State, Department of Industry (Mr. Norman Lamont): I hope that my hon. Friend the Member for Southampton, Test (Mr. Hill) will forgive me if I do not follow him down his beguiling path of free ports, privatisation, and the flotation of docks, all meeting in one. He will understand that I am not in a position to say anything about free ports today, although I want to say something later about one of his points.
I understand why the hon. Member for Southampton, Itchen (Mr. Mitchell) thinks that his amendment is an attractive proposition. He would argue that it gives flexibility to British Shipbuilders—something that we


have said is one part and purpose of the Bill. However, for reasons that I shall explain—they are not quite as sinister as those attributed to us by the hon. Member for Newcastle upon Tyne, East (Mr. Thomas)—I am afraid that I shall have to recommend the House to reject the amendment, because of the regard and consideration that we must give to the private sector and the competition between the public and private sectors.
The hon. Gentleman's amendment is not quite as restrictive as he may think. It refers not to activities carried out in shipbuilding yards, but to activities that are capable of being carried out in British Shipbuilders' yards. I do not know whether the hon. Gentleman deliberately intended that, but I must stress that it means that activities could be carried on in new establishments, and British Shipbuilders would be able to create new establishments for the purposes of those activities. The amendment speaks of activities
which can be carried out",
and that is why I stick to what I have said.

Mr. Mike Thomas: Is the Minister saying that if the wording of the amendment were "such other activities as may from time to time appear to them to be desirable and which were to be carried out within their existing shipyards", it would be acceptable?

Mr. Lamont: The hon. Gentleman must not charge at everything. I was only trying to explain the exact meaning of the amendment, so that the House could be informed. It was an observation in passing. I did not say that it altered the merits or demerits of the amendment.
My hon. Friend the Member for Test was right when he said that British Shipbuilders can diversify and move into other areas, provided that it does so with the consent of the Secretary of State. In my view, that is the right balance and the right degree of freedom for British Shipbuilders.
The present circumstances of British Shipbuilders are not dissimilar from those of a company in the private sector. Companies are limited by their memoranda of association as to the activities in which they may engage. If they want to change those activties, they have to obtain the consent of 75 per cent. of the shareholders. That is not miles removed from the idea that British Shipbuilders, in order to diversify into another area, should get the consent of the Secretary of State.

Mr. R. C. Mitchell: Can the Minister give an under-taking that if British Shipbuilders were to approach him and ask to diversify, he would look at the matter very sympathetically?

Mr. Lamont: Of course, if British Shipbuilders comes to us with a proposition for diversifying, we shall look at it, but we would have to have regard to the effect on the private sector. The hon. Gentleman asks me whether I will look at the matter sympathetically. I can tell him that the British Steel Corporation has come to the Government on a number of occasions and asked to form a joint venture with the private sector. On occasions we have allowed that to happen. The British Steel Corporation—this is the point that my hon. Friend made—has been able to do that only because the statute governing British Steel has been altered in the same way as the statutes relating to British Shipbuilders are now being altered by the Bill. This Bill will have a little of the effect that the hon. Gentleman seeks.

Dr. J. Dickson Mabon: The Minister said that he would look sympathetically on such a proposition within the context of the present statute, as I understood him. Can he, off the cuff, give an example where either a previous Secretary of State or the present Secretary of State has assented to something of this nature from British Shipbuilders?

Mr. Lamont: No, we have not given such an assent during the lifetime of this Government, but I have told the House that there have been a number of occasions on which British Steel has formed joint companies with the private sector. One of the purposes of this Bill is to allow joint companies to be formed between British Shipbuilders and the private sector.
In asking British Shipbuilders to seek the approval of the Secretary of State if it wants to diversify on its own, I believe that we have got the balance about right. We have to have regard to the overlap between the public and private sectors. All nationalised industries are sources of complaint about unfair competition. On British Shipbuilders and British Steel we get continual allegations of unfair competition, taxpayers' money being used to subsidise prices, thus damaging employment in the private sector. I accept what the hon. Gentleman said about a firm in Germany that diversified to save jobs. That may be attractive, but it would not be so attractive if the effect were to displace jobs in the private sector. This is one of the criteria against which one should judge a proposition of this nature: what will the impact be on the private sector, and will it damage in any way employment or the health of companies in the private sector?
The hon. Member for Newcastle upon Tyne, East said that this was an unfair balance. The phrase he used was that this was a one-way street, because if the private sector wanted to move into competition with the public sector there would be no objection. He wanted to know why the public sector could not compete with the private sector. The cases are quite different. We have to have regard to the uses to which taxpayers' money is put and the effects of possible unfair competition.
Although I understand the motives of the hon. Member for Southampton Itchen, (Mr. Mitchell) in tabling the amendment, I regret that l must advise my hon. Friends to vote against it in the event of a Division.

7 pm

Mr. R. C. Mitchell: I am not happy with the Minister's reply but in view of certain assurances that he has given, and on the understanding that we may want to return to this matter after the Bill has been debated in the other place, I ask the leave of the House to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2

ORGANISATION ETC. OF BRITISH SHIPBUILDERS' ACTIVITIES

Dr. Oonagh McDonald: I beg to move amendment No. 2, in page 3, line 8, leave out 'the national interest' and insert
'national defence and security, and a draft of the direction has been approved by resolution of the House of Commons'.

Mr. Deputy Speaker (Mr. Bernard Weatherill): With this we may take amendment No. 3 in page 4, line 20, leave out subsection (7).

Dr. McDonald: We have tabled amendment No. 2 because of the damage done by the Bill to the Aircraft and Shipbuilding Industries Act 1977. As one of its duties, the 1977 Act laid upon British Shipbuilders the duty to consider national defence and that has been removed by the Bill. The amendment has been tabled to ensure that the Secretary of State is obliged to take national defence and security into account instead of just the national interest because that concept is extremely vague and has been made even vaguer by the Government's refusal to define "national interest" in the way in which it was defined in the original Act. Therefore, any direction which the Secretary of State gives to British Shipbuilders must come before Parliament and be approved. That is to ensure that any of the directions which might be given as described in clause 2 are considered in detail by the House.
Amongst the directions which the Secretary of State might give to British Shipbuilders is the direction to dispose of any of its wholly owned subsidiaries or to ensure that one of its wholly owned subsidiaries is jointly owned by public and private enterprise. In other words, this is the part of the Bill which makes the Bill an enabling one, allowing for the privatisation of part of British Shipbuilders.
We are all entirely clear about the part of British Shipbuilders of which the Government would like to dispose—the companies in the warship building division so that the profits from Ministry of Defence contracts can go into private hands. That is really what the Bill is all about. It is aimed at selling off the wholy owned subsidiary companies in the warship building division, the only profitable part of British Shipbuilders. That is understandable enough when papers such as the Financial Times can describe the present state of world shipping by saying that there are just too many ships. Only warship building is likely to make any money at the moment. The amendment would mean that if the Secretary of State decided to sell off one of the companies the plans would come before the House of Commons for consideration so that we would be able to take into account such issues.
If the profitable elements of British Shipbuilders go into private hands, what will happen to merchant shipping? That will be a consideration entirely in line with our insistence that national defence and security must be considered. Traditionally, merchant shipping has been the fourth arm of our defences. The Falklands war showed how important merchant shipping is, not just for our economy but for our defence. The Falklands war also showed the decline in the British merchant fleet which has taken place since 1975 when, under a Labour Government, shipping was doing well and there were 1,600 ships flying the British flag compared with the expected 913 ships at the end of 1983.
Therefore, if the profitable part of British Shipbuilders is sold off, the implications are extremely important for national security and national defence. It could mean a loss of capacity for building British merchant ships, ships which would be wholly owned by British companies and which would fly the British flag. That would seriously weaken our nation's defences. If the Falklands war had occurred in 1985 rather than last year, on present trends there would have been no merchant fleet to use—nor a

Navy—in order to carry out the Prime Minister's directions to rescue the Falklanders from Argentina's attack.
On the other hand, if we considered a draft direction which the Secretary of State had brought forward to sell off part of the warship building division it would cause the House of Commons to look closely at the Government's plans for warship building and their treatment of British Shipbuilders. The position was admirably summed up in the first report of the Select Committee on Industry and Trade in the 1981–82 Session where the evidence received was summed up when it said that British Shipbuilders protested that the Government typically
suddenly withdraw orders, cancel orders, keep limiting us with financial constraints, do not tell us what orders we are going to get and do not help us to sell our ships overseas".
The Select Committee commented:
We are not surprised that this should be the 'subject of very strong protestation from British Shipbuilders to both MoD and the Navy'".
It goes on to quote Mr. Atkinson's cri de coeur:
You cannot turn a tap on and off in warship building because of the very great national skills involved.
The amendment would enable Parliament, not just the Select Committee—although its work has been extremely important and valuable—to scrutinise any draft direction which the Secretary of State brought before it. It would give Parliament the opportunity to consider the relationship between Government and British Shipbuilders and the whole process of warship building and to decide whether the Government were advancing Britain's defence and security by their actions. We would be able to consider not only the Government's behaviour but whether privatisation would help to maintain or improve our warship building capacity. Once we began to examine the privatisation proposals in detail, we would see that that was not the case because to take out one company would mean the loss to that company of the skills and technical knowledge which had been built up not just by one company but by the whole group of companies in the warship building division—the exchange of information; skilled workers; technical skills and advanced technical knowledge. There would not be such a flow of information from the warship building division of British Shipbuilders to any one company that was so privatised.
The amendment obliges the Secretary of State to bring his plans before Parliament to enable Parliament to consider closely everything that the Government were doing in relation to warship building and, therefore, in relation to the nation's defence and security. That would enable not only Parliament but the people to see that the Government are failing miserably in this respect.

Mr. Dixon: I am glad that my hon. Friend the Member for Thurrock (Dr. McDonald) has referred not only to warship building but to merchant shipping, to which the amendment is directed. National defence and security mean not only warship building. As an island we depend on our merchant fleet for our trade. Indeed, 98 per cent. by weight of our trade is carried by sea. Therefore, we require not only a merchant fleet but a capacity to build and maintain it and, indeed, to safeguard it.
As my hon. Friend said, the Falklands war showed Britain's dependence on a merchant fleet. But the fleet's continued decline will make further dependence almost impossible. It is already a fact that the fortress Falklands


policy cannot be carried out solely by United Kingdom ships. We have had to charter foreign ships to be sent to the south Atlantic.
Over the past seven years the number of British registered ships has fallen from 1,614 to 900. United Kingdom owned and registered tonnage has fallen by almost one third since the beginning of 1981. Our capacity to have and to maintain a fleet is vitally important.
The Bill will not only hive off the warship section of our shipbuilding industry but will make it impossible for a merchant shipping capacity to be maintained. That is why we believe that the merchant shipping part of the British shipbuilding industry is important to our security.
At present, the fleet has been cut back and no training is taking place. I read in Lloyd's List of 10 February 1983 that, although the West German fleet has declined, West Germany is increasing training for personnel. We have reduced the amount of training for our personnel. When an order for a liner was given by the P and 0 company to the Finnish shipbuilding industry, my right hon. Friend the Member for Salford, West (Mr. Orme) wrote to the Prime Minister drawing her attention to the effect that this could have on our shipbuilding industry. In her reply, the Prime Minister said:
The problem for both United Kingdom yards"—
she was referring to the Tyne shipyard and Harland and Wolff—
was not the building of the engine or the steelwork of the ship but having or being able to recruit in time the large number of skilled outfitters required. A joint approach would not therefore have helped them to meet P &amp; O's delivery date.
According to the Prime Minister, that £80 million order went to Finland because we did not have the skilled tradesmen required for the outfitting. If that is so, how on earth can we depend in future on our capacity to build ships? In 1978–79 31,000 apprentices and trainee technicians were recruited. This year, only 10,670 have been recruited—fewer than 50 per cent. of the 1979 figure.
We require investment, training and the capacity not only to build ships in future but to train seafarers. We have the naval architectural college in Newcastle, Sunderland polytechnic and South Shields marine and technical college, all of which train seafarers. If we do not have a combined maritime policy for shipbuilding, whether it be warships or merchant ships, the security of our islands will be diminished. Therefore, I hope that the Minister will accept the amendment.

Mr. Norman Lamont: I am sure that the House will not be surprised that I cannot recommend that the amendment be accepted.

Dr. John Cunningham: Why not?

Mr. Lamont: I am glad that the hon. Member for Whitehaven (Dr. Cunningham) is so easily surprised. The reason for that is that the effects of the amendment, whether intended or unintended, would wreck the Bill.
The effect of the first part of the amendment would be that the Government would be able to give a direction only if that direction furthered national defence and security interests. It is difficult to see how privatisation could fulfil that objective.

Dr. John Cunningham: I do not think that it can.

Mr. Lamont: The hon. Gentleman says that he does not think that it can, and, indeed, that is not the purpose of privatisation. There are reasons other than furthering

national security for giving a direction. It may be that assets will be more productively employed in the private sector. It may be the Government's view that the organisation will be more efficiently run in the private sector. But defence and security, important though they are, are not obviously the only national interest.

Mr. Mike Thomas: I hope that the Minister will forgive me for charging at him again. Does not the national interest—the hon. Member for Thurrock (Dr. McDonald) put it rather well—consist of what the Government define to be the national interest at any particular moment? Why on earth does the Minister go through all this convoluted nonsense when what he wants is the power to give a directive whenever the Government decide that they want to do so with no restrictions? Is that true?

Mr. Lamont: The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) is complaining about the vagueness of the term "the national interest" as incorporated in the Bill. One has some sympathy with that complaint. We debated it at some length in Committee. But the Committee had to consider whether it was better that the Secretary of State had complete unchallenged power or whether some attempt was made to qualify it. That is why the words were inserted in the Bill. However, the political purposes of the legislation will not be satisfied by defining "the national interest" so narrowly. Of course, defence and security is an important national interest, but it is not the only one. Other legislation—the Iron and Steel Act 1982, the Gas Act 1980, the Transport Act 1981 and the Oil and Gas (Enterprise) Act 1982—has given Governments the power to make directions. All those industries have strategic or defence implications. None of them has confined those directions only to where they furthered defence interests.

Mr. R. C. Mitchell: Will the Minister give an example of where his having to take due account of the national interest would restrict him in his decision?

Mr. Lamont: The Government are unlikely to put forward a proposition unless they think that it will further the national interest. But the hon. Member for Southampton, Itchen (Mr. Mitchell) will understand that words in the Act are there not only for the convenience of the Government but so that other people can base legal actions and have some safeguards arising from the qualifications to the Government's power.

Dr. John Cunningham: rose—

Mr. Lamont: That is why the provision was put in the Bill. The provision qualifies it. It is there for citizens who might wish to take a legal action against the Government or who felt that they could mount an action on the basis that the Government had not satisfied what was written into the legislation.

Dr. John Cunningham: Have not my hon. Friend's amendment and the question from the hon. Member for Southampton, Itchen (Mr. Mitchell) completely exposed the Government's position in this matter? The Government are forcing the Bill through on ideological grounds regardless of the national defence and security interests. Is that not why the Minister has suddenly become flustered?

Mr. Lamont: There is no reason why defence interests should be damaged in any way by the legislation. It is a different proposition to argue that one must further defence interests before one can take any act of privatisation or denationalisation. That is an absurd proposition, which will not commend itself or be remotely persuasive to any Conservative Members.
We have taken powers in the legislation to safeguard defence interests. We have taken certain powers to ensure that the control of defence industries does not fall into hands that the Government consider undesirable. Provisions relating to the ownership of defence interests are carefully written into the legislation.

Mr. Mike Thomas: The Minister referred to the narrow point of the definition in the courts of the national interest and the rights of individuals and others. The hon. Gentleman cannot be serious. Can he give us any instance of an individual or organisation having the chance of going to court to obtain a ruling that an action of the Government was not in the national interest when legislation gives the Government the power to give any instruction they choose, in the national interest?

Mr. Lamont: If the hon. Gentleman thinks that that is so inconceivable, he should explain why he voted for the original 1977 legislation, which incorporates the same concept of the national interest as defined by the Secretary of State. He supported it then, but for some reason today he finds it a wholly unacceptable argument.
The second part of the amendment also has the consequence of a wrecking amendment because most, if not all, the orders, to discontinue, restrict activities or dispose would relate to members of a specific class. Therefore, to apply an affirmative procedure to the orders would make them hybrid. They would be subject to the procedure for private or hybrid Bills. To have to adopt such a laborious and time-wasting procedure would not be attractive for the Government. It would blunt the powers considerably.
Therefore, I am afraid that for those reasons I cannot accept the amendment. I emphasise again that there is no reason why, if warship building were in private hands that should endanger our defence policies in any way any more than the fact that the aerospace industry is in private hands and is one of the most competitive and successful of our industries. Therefore, I urge my hon. Friends to reject the amendment.

Dr. McDonald: The Opposition believe that the Minister's response was amazing.
I make it clear that the amendment is not intended to be a wrecking amendment. Throughout the lengthy progress of the Bill through Committee, when we did not hear satisfactory answers from either of the Ministers, although we gave them plenty of time to consider every aspect of the Bill, we have been concerned that the duties that the 1977 Act laid on British Shipbuilders were being transferred to the Secretary of State, not as duties, but as powers. He has powers to give all sorts of directions to British Shipbuilders, including the power to privatise wholly-owned subsidiaries in the warship building division. The Minister said in reply that privatisation should be allowed to go ahead regardless of national defence and security. That is what he implied in his remarks. The Government are fond of accusing the Labour party of being the party of ideology and unreality. In his

reply I thought that the Minister was momentarily going mad through his ideology. It was a matter of privatisation at any cost to the nation's defence and security. To suggest that those are not matters that cause the gravest concern to Members of Parliament that should therefore be considered by the House is extremely odd.
It is vital for strategic reasons that we retain a warship building capacity through British Shipbuilders. Part of the argument is that if some of the companies at present owned by British Shipbuilders are privatised, that could affect our ability to defend ourselves in certain respects—for example, it could affect the merchant shipbuilding capacity, which might be damaged. It is an important aspect of the nation's defence.
One can conduct those arguments in general terms, but they are much better conducted if one looks at a detailed proposal. That is part of our reason for suggesting that a detailed proposal should be considered in the House, yet the Minister seems to think that that is odd and that it would be better if his right hon. Friend were allowed to press ahead with privatisation regardless of its impact on our shipbuilding capacity.
The EC, which is currently examining shipbuilding in the Community, insists that it is extremely important for it to maintain its warship building capacity for strategic reasons. That is our point. That is what we want to be maintained. We can see the possibility, indeed the probability, of our defence being weakened by selling or flogging companies in the warship building division to private enterprise, so that the profitable part of British Shipbuilders disappears. We are well aware of the Minister's reason for wanting to do that. It is that the profits would go into the hands of private enterprise and private persons, and some might give money to the Conservative party.
For the Minister to say that the Government's purely ideological decisions should not be trammelled or considered by Parliament, as our amendment suggests, is an extraordinary and unsatisfactory reply to our arguments in support of the amendment. Therefore, I must press the amendment to a Division.

Question put, That the amendment be made:—

The House divided: Ayes 204, Noes 276.

Division No. 78]
[7.27 pm


AYES


Abse, Leo
Carmichael, Neil


Allaun, Frank
Carter-Jones, Lewis


Alton, David
Cartwright, John


Anderson, Donald
Clark, Dr David (S Shields)


Archer, Rt Hon Peter
Clarke, Thomas (C'b'dge, A'rie)


Ashley, Rt Hon Jack
Cocks, Rt Hon M. (B'stol S)


Ashton, Joe
Coleman, Donald


Barnett, Guy (Greenwich)
Concannon, Rt Hon J. D.


Barnett, Rt Hon Joel (H'wd)
Conlan, Bernard


Beith, A. J.
Cook, Robin F.


Benn, Rt Hon Tony
Cowans, Harry


Bennett, Andrew (St'kp't N)
Cox, T. (W'dsw'th, Toot'g)


Bidwell, Sydney
Craigen, J. M. (G'gow, M'hill)


Booth, Rt Hon Albert
Crowther, Stan


Boothroyd, Miss Betty
Cryer, Bob


Bray, Dr Jeremy
Cunningham, G. (Islington S)


Brocklebank-Fowler, C.
Cunningham, Dr J. (W'h'n)


Brown, Hugh D. (Provan)
Dalyell, Tam


Brown, R. C. (N'castle W)
Davidson, Arthur


Brown, Ronald W. (H'ckn'y S)
Davis, Clinton (Hackney C)


Brown, Ron (E'burgh, Leith)
Davis, Terry (B'ham, Stechf'd)


Campbell, Ian
Deakins, Eric


Campbell-Savours, Dale
Dean, Joseph (Leeds West)


Canavan, Dennis
Dewar, Donald


Cant, R. B.
Dixon, Donald






Dormand, Jack
Newens, Stanley


Douglas, Dick
Oakes, Rt Hon Gordon


Dubs, Alfred
O'Halloran, Michael


Duffy, A. E. P.
O'Neill, Martin


Dunwoody, Hon Mrs G.
Orme, Rt Hon Stanley


Eadie, Alex
Palmer, Arthur


Eastham, Ken
Park, George


Edwards, R. (W'hampt'n S E)
Parker, John


Ellis, R. (NE D'bysh're)
Parry, Robert


Ellis, Tom (Wrexham)
Pavitt, Laurie


English, Michael
Pitt, William Henry


Ennals, Rt Hon David
Powell, Raymond (Ogmore)


Evans, loan (Aberdare)
Radice, Giles


Ewing, Harry
Rees, Rt Hon M (Leeds S)


Faulds, Andrew
Richardson, Jo


Fitch, Alan
Roberts, Allan (Bootle)


Ford, Ben
Roberts, Ernest (Hackney N)


Forrester, John
Roberts, Gwilym (Cannock)


Foster, Derek
Robertson, George


Foulkes, George
Robinson, G. (Coventry NW)


Fraser, J. (Lamb'th, N'w'd)
Rodgers, Rt Hon William


Freeson, Rt Hon Reginald
Rooker, J. W.


Garrett, John (Norwich S)
Roper, John


Garrett, W. E. (Wallsend)
Ross, Ernest (Dundee West)


George, Bruce
Ross, Stephen (Isle of Wight)


Gilbert, Rt Hon Dr John
Ryman, John


Golding, John
Sandelson, Neville


Gourlay, Harry
Sever, John


Graham, Ted
Sheerman, Barry


Hamilton, James (Bothwell)
Sheldon, Rt Hon R.


Hamilton, W. W. (C'tral Fife)
Shore, Rt Hon Peter


Hardy, Peter
Short, Mrs Renée


Harrison, Rt Hon Walter
Silkin, Rt Hon J. (Deptford)


Hart, Rt Hon Dame Judith
Silkin, Rt Hon S. C. (Dulwich)


Haynes, Frank
Silverman, Julius


Heffer, Eric S.
Skinner, Dennis


Hogg, N. (E Dunb't'nshire)
Smith, Cyril (Rochdale)


Holland, S. (L'b'th, Vauxh'll)
Smith, Rt Hon J. (N Lanark)


Homewood, William
Spearing, Nigel


Hooley, Frank
Spellar, John Francis (B'ham)


Hoyle, Douglas
Spriggs, Leslie


Hughes, Mark (Durham)
Stallard, A. W.


Janner, Hon Greville
Stewart, Rt Hon D. (W Isles)


Jay, Rt Hon Douglas
Stoddart, David


John, Brynmor
Stott, Roger


Johnson, James (Hull West)
Strang, Gavin


Jones, Barry (East Flint)
Straw, Jack


Jones, Dan (Burnley)
Summerskill, Hon Dr Shirley


Lambie, David
Taylor, Mrs Ann (Bolton W)


Leadbitter, Ted
Thomas, Jeffrey (Abertillery)


Lewis, Ron (Carlisle)
Thomas, Mike (Newcastle E)


Litherland, Robert
Thomas, Dr R. (Carmarthen)


Lofthouse, Geoffrey
Thorne, Stan (Preston South)


Lyon, Alexander (York)
Tinn, James


Lyons, Edward (Bradf'd W)
Torney, Tom


Mabon, Rt Hon Dr J. Dickson
Varley, Rt Hon Eric G.


McCartney, Hugh
Wainwright, E. (Dearne V)


McDonald, Dr Oonagh
Wainwright, R. (Colne V)


McElhone, Mrs Helen
Walker, Rt Hon H. (D'caster)


McGuire, Michael (Ince)
Warden, Gareth


McKelvey, William
Watkins, David


MacKenzie, Rt Hon Gregor
Wellbeloved, James


McNally, Thomas
Welsh, Michael


McNamara, Kevin
White, Frank R.


McTaggart, Robert
Whitlock, William


Marks, Kenneth
Wigley, Dafydd


Marshall, D(G'gow S'ton)
Willey, Rt Hon Frederick


Marshall, Dr Edmund (Goole)
Wilson, Gordon (Dundee E)


Marshall, Jim (Leicester S)
Wilson, Rt Hon Sir H. (H'ton)


Martin, M(G'gow S'burn)
Wilson, William (C'try SE)


Mason, Rt Hon Roy
Winnick, David


Maxton, John
Woodall, Alec


Meacher, Michael
Woolmer, Kenneth


Millan, Rt Hon Bruce
Wright, Sheila


Miller, Dr M. S. (E Kilbride)



Mitchell, R. C. (Soton Itchen)
Tellers for the Ayes:


Morris, Rt Hon A. (W'shawe)
Mr. Lawrence Cunliffe and


Morris, Rt Hon C. (O'shaw)
Mr. Allen McKay.


Morton, George






NOES


Alexander, Richard
Fletcher, A. (Ed'nb'gh N)


Alison, Rt Hon Michael
Fletcher-Cooke, Sir Charles


Amery, Rt Hon Julian
Fookes, Miss Janet


Ancram, Michael
Forman, Nigel


Arnold, Tom
Fox, Marcus


Aspinwall, Jack
Fraser, Rt Hon Sir Hugh


Atkins, Rt Hon H. (S'thorne)
Fraser, Peter (South Angus)


Atkins, Robert (Preston N)
Fry, Peter


Atkinson, David (B'm'th,E)
Gardiner, George (Reigate)


Baker, Nicholas (N Dorset)
Gardner, Sir Edward


Banks, Robert
Garel-Jones, Tristan


Beaumont-Dark, Anthony
Gilmour, Rt Hon Sir Ian


Bendall, Vivian
Goodlad, Alastair


Bennett, Sir Frederic (T'bay)
Gorst, John


Benyon, Thomas (A'don)
Gow, Ian


Benyon, W. (Buckingham)
Gower, Sir Raymond


Berry, Hon Anthony
Grant, Sir Anthony


Best, Keith
Gray, Rt Hon Hamish


Bevan, David Gilroy
Greenway, Harry


Biffen, Rt Hon John
Griffiths, E. (B'ySt. Edm'ds)


Biggs-Davison, Sir John
Griffiths, Peter (Portsm'th N)


Blackburn, John
Grist, Ian


Blaker, Peter
Grylls, Michael


Body, Richard
Gummer, John Selwyn


Bonsor, Sir Nicholas
Hamilton, Hon A.


Bottomley, Peter (W'wich W)
Hamilton, Michael (Salisbury)


Bowden, Andrew
Hannam, John


Boyson, Dr Rhodes
Haselhurst, Alan


Braine, Sir Bernard
Hawkins, Sir Paul


Bright, Graham
Hawksley, Warren


Brinton, Tim
Hayhoe, Barney


Brittan, Rt. Hon. Leon
Heddle, John


Brooke, Hon Peter
Henderson, Barry


Brotherton, Michael
Hicks, Robert


Brown, Michael (Brigg &amp; Sc'n)
Higgins, Rt Hon Terence L.


Browne, John (Winchester)
Hill, James


Bryan, Sir Paul
Hogg, Hon Douglas (Gr'th'm)


Buchanan-Smith, Rt. Hon. A.
Holland, Philip (Carlton)


Buck, Antony
Hooson, Tom


Budgen, Nick
Hordern, Peter


Burden, Sir Frederick
Howe, Rt Hon Sir Geoffrey


Carlisle, John (Luton West)
Howell, Ralph (N Norfolk)


Carlisle, Kenneth (Lincoln)
Hunt, David (Wirral)


Carlisle, Rt Hon M. (R'c'n)
Hunt, John (Ravensbourne)


Chalker, Mrs. Lynda
Hurd, Rt Hon Douglas


Chapman, Sydney
Irvine, Rt Hon Bryant Godman


Churchill, W. S.
Irving, Charles (Cheltenham)


Clark, Hon A. (Plym'th, S'n)
Jenkin, Rt Hon Patrick


Clark, Sir W. (Croydon S)
Jessel, Toby


Clarke, Kenneth (Rushcliffe)
Jopling, Rt Hon Michael


Cockeram, Eric
Joseph, Rt Hon Sir Keith


Colvin, Michael
Kaberry, Sir Donald


Cope, John
Kershaw, Sir Anthony


Corrie, John
King, Rt Hon Tom


Costain, Sir Albert
Kitson, Sir Timothy


Cranborne, Viscount
Knight, Mrs Jill


Critchley, Julian
Knox, David


Crouch, David
Lamont, Norman


Dickens, Geoffrey
Lang, Ian


Dorrell, Stephen
Langford-Holt, Sir John


Douglas-Hamilton, Lord J.
Latham, Michael


Dover, Denshore
Lawrence, Ivan


du Cann, Rt Hon Edward
Lawson, Rt Hon Nigel


Dunn, Robert (Dartford)
Lee, John


Durant, Tony
Le Marchant, Spencer


Dykes, Hugh
Lennox-Boyd, Hon Mark


Eden, Rt Hon Sir John
Lester, Jim (Beeston)


Edwards, Rt Hon N. (P'broke)
Lewis, Sir Kenneth (Rutland)


Eggar, Tim
Lloyd, Ian (Havant &amp; W'loo)


Elliott, Sir William
Lloyd, Peter (Fareham)


Emery, Sir Peter
Loveridge, John


Eyre, Reginald
Lyell, Nicholas


Fairbairn, Nicholas
McCrindle, Robert


Fairgrieve, Sir Russell
MacKay, John (Argyll)


Faith, Mrs Sheila
Macmillan, Rt Hon M.


Farr, John
McNair-Wilson, M. (N'bury)


Fell, Sir Anthony
McNair-Wilson, P. (New F'st)


Finsberg, Geoffrey
McQuarrie, Albert


Fisher, Sir Nigel
Major, John






Marland, Paul
Shaw, Sir Michael (Scarb')


Marshall, Michael (Arundel)
Shelton, William (Streatham)


Marten, Rt Hon Neil
Shepherd, Colin (Hereford)


Mates, Michael
Shepherd, Richard


Maude, Rt Hon Sir Angus
Silvester, Fred


Mawby, Ray
Sims, Roger


Mawhinney, Dr Brian
Skeet, T. H. H.


Maxwell-Hyslop, Robin
Smith, Tim (Beaconsfield)


Mayhew, Patrick
Speed, Keith


Mellor, David
Speller, Tony


Meyer, Sir Anthony
Spence, John


Miller, Hal (B'grove)
Spicer, Jim (West Dorset)


Mills, Iain (Meriden)
Sproat, Iain


Mills, Sir Peter (West Devon)
Stainton, Keith


Miscampbell, Norman
Stanbrook, Ivor


Mitchell, David (Basingstoke)
Stanley, John


Moate, Roger
Steen, Anthony


Monro, Sir Hector
Stevens, Martin


Montgomery, Fergus
Stewart, A.(E Renfrewshire)


Moore, John
Stewart, Ian (Hitchin)


Morris, M. (N'hampton S)
Stokes, John


Morrison, Hon C. (Devizes)
Stradling Thomas, J.


Mudd, David
Taylor, Teddy (S'end E)


Murphy, Christopher
Tebbit, Rt Hon Norman


Myles, David
Temple-Morris, Peter


Neale, Gerrard
Thompson, Donald


Needham, Richard
Thorne, Neil (llford South)


Nelson, Anthony
Thornton, Malcolm


Neubert, Michael
Townend, John (Bridlington)


Newton, Tony
Townsend, Cyril D, (B'heath)


Nott, Rt Hon Sir John
Trippier, David


Onslow, Cranley
van Straubenzee, Sir W.


Oppenheim, Rt Hon Mrs S.
Vaughan, Dr Gerard


Osborn, John
Viggers, Peter


Page, Richard (SW Herts)
Waddington, David


Parris, Matthew
Wakeham, John


Patten, Christopher (Bath)
Waldegrave, Hon William


Pawsey, James
Walker, B. (Perth)


Percival, Sir Ian
Walker-Smith, Rt Hon Sir D.


Peyton, Rt Hon John
Wall, Sir Patrick


Pink, R. Bonner
Waller, Gary


Pollock, Alexander
Walters, Dennis


Porter, Barry
Ward, John


Prentice, Rt Hon Reg
Warren, Kenneth


Price, Sir David (Eastleigh)
Watson, John


Proctor, K. Harvey
Wells, Bowen


Pym, Rt Hon Francis
Wells, John (Maidstone)


Rathbone, Tim
Wheeler, John


Rees-Davies, W. R.
Whitelaw, Rt Hon William


Renton, Tim
Whitney, Raymond


Rhodes James, Robert
Wickenden, Keith


Ridley, Hon Nicholas
Wiggin, Jerry


Ridsdale, Sir Julian
Wilkinson, John


Rifkind, Malcolm
Williams, D. (Montgomery)


Rippon, Rt Hon Geoffrey
Winterton, Nicholas


Roberts, Wyn (Conway)
Wolfson, Mark


Robinson, P. (Belfast E)
Young, Sir George (Acton)


Rossi, Hugh



Rost, Peter
Tellers for the Noes:


Sainsbury, Hon Timothy
Mr. Carol Mather and


St. John-Stevas, Rt Hon N.
Mr. Robert Boscawen.


Shaw, Giles (Pudsey)

Question accordingly negatived.

Orders of the Day — British Shipbuilders Bill

Mr. Norman Lamont: I beg to move, That the Bill be now read the Third time.
For a three-clause Bill to have had 16 sittings in Committee must be a record. It shows the interest in and strong feelings about it. Although we have had 16 sittings, it is right for me to set out again the Government's position on what are undoubtedly extremely important issues.
The Bill has been described as a privatisation measure, but it is an enabling Bill that makes privatisation possible by two routes—outright disposal and the introduction of private capital. To open both those routes to privatisation, the Bill loosens the statutory straitjacket on British Shipbuilders. It replaces the corporation's statutory duties to engage in shipbuilding and related activities by powers. From now on, British Shipbuilders will be free to choose whether to engage in the activities that it has powers to carry out according to its commercial judgment. It will make it possible for private capital to be injected into British Shipbuilder's subsidiaries.
The way will be clear for the corporation to act jointly with other companies, if it so wishes. I emphasise "if it so wishes" because there was confusion among Opposition Members when we talked about joint ventures. It was their impression that the Government were making an announcement about the imminent creation of some joint ventures. The important provision is that the Bill unambiguously givers British Shipbuilders the statutory cover to engage in joint ventures if it wishes. That is not the only way to privatisation, but the Bill makes it clear that the joint venture route is now available.
British Shipbuilders will be free to decide its own areas of operation, but the decision on where to draw the line between the public and private sectors cannot be left to only one part of the industry. Nationalised industry chairmen and boards do not always fall over themselves to surrender part of their empire, so the Bill also gives the Government new powers to direct British Shipbuilders to cease or to restrict activities or to dispose of assets. Naturally, we hope that any disposals will take place as a result of agreement and that it will not be necessary to use those powers.
Powers to restrict an activity are also provided for the purpose of strengthening the Government's position when dealing with unfair competition. All hon. Members are aware of the many disputes that arise between the public and private sectors in the area of overlap. I have often received complaints from hon. Members on both sides of the House about the overlap between public and private enterprise. Hon. Members know of the anxieties that have been expressed by private sector ship repairers and engine builders about alleged unfair competition from British Shipbuilders.
These powers would be relevant if British Shipbuilders were to engage in unfair competition with established shipping interests. I emphasise that British Shipbuilders has no plans so to do, but there is understandable concern that, in the present depressed markets for both shipbuilding and shipping, British Shipbuilders might be tempted to enter the market to employ unsold ships. If necessary, the Government would consider using the new powers to prevent the corporation from doing so.
In Committee, Opposition Members emphasised the difficulties faced by the corporation and argued that the timing of the Bill was wrong. They argued that it was wrong to change even the statutory framework within which the industry operates. I am not persuaded by that argument. The important feature of the Bill is that it gives the corporation the opportunity to make decisions about its own establishment and activities. When the Bill is enacted, the board will have a greater opportunity to decide in which activities it wishes to be involved. It can decide whether to work in co-operation with the private sector in joint ventures. At present that is not possible, and any doubt about the matter is plainly absurd.
British Shipbuilders faces a difficult market. The world markets for merchant shipbuilding, ship repair and offshore work remain depressed. As the half year results show, British Shipbuilders will this year considerably overrun its loss target. But one bright spot is that since the introduction of the Bill British Shipbuilders has received £585 million worth of orders for new naval ships, partly to replace our Falklands losses, and another frigate will be ordered this year. The prospects in other markets remain uncertain.
It is unlikely that British Shipbuilders can secure orders for merchant ships without subsidy. The House will be glad to know that the European Commission recently agreed to our proposal that the Government should make available £20 million of intervention fund from January to July 1983. The fifth directive on shipbuilding aids, under which shipbuilding support is authorised, expired at the end of December 1982, and the Commission's previous approval covered only July to December 1982, for which the amount was also £20 million. The directive has since been extended until the end of 1984. We shall be approaching the Commission in due course about a further tranche of intervention fund to start after the expiry of the present one.
The Government recognise the difficult and uncertain position of the corporation, and after considering British Shipbuilders' corporate plan we have accordingly decided to increase the corporation's external financing limit from this year's £122 million to £160 million for 1983–84. Within that framework, the corporation will be required to have a continuing duty to make substantial and early progress towards providing an adequate return on the capital employed by the corporation and its subsidiaries.
Another point made frequently in Committee, and repeated a moment ago by the hon. Member for Thurrock (Dr. McDonald), was that the Bill would damage our defence capability. Our main defence need is for a strong and efficient naval shipbuilding capacity. I see no reason why that should be affected whether naval shipbuilding is in the private sector or in a mix of the public and private sectors. An element of privatisation could even assist warship building. Opposition Members have agreed that investment in that area has suffered because of greater than expected losses in other parts of British Shipbuilders.
Privatisation could lead to the injection of more capital, which might improve the competitiveness of the industry. That is needed because the warship yards' export performance has not been impressive recently. Some hon. Members said that it weakened our national defence because the Bill has repealed section 2 of the 1977 Act. That section required that British Shipbuilders, not the Government, should have full regard to the requirements of national defence. That is an absurd argument.
The needs of national defence cannot be determined by companies or corporations, however eminent. De Fence must be decided by the Government, and it would be ridiculous, as hon. Members came close to suggesting in Committee, to decide that the capability of our Navy and the balance between surface ships and submarines should be decided by a corporation, or that the industry should have a view of defence needs that is independent of the Government. However, hon. Members cannot seriously believe that argument. They moved behind it as a convenient way to argue that matters should remain as they are and that capacity should always be maintained regardless of need and cost.
Individual organisations must work within the framework of the Government's defence policy. As the MOD is an enormously important customer for British Shipbuilders, plainly the corporation will, without a specific provision in the legislation, pay close attention to the MOD's needs.
Another argument deployed in Committee was that the privatisation of warship building, if it happened, would weaken the merchant yards and make closures more likely. I recognise the genuine anxiety felt on that point, but I think that it is a mistaken argument. Any sense of security built on the back of warship building results is, I am afraid, misplaced. The warship building side of British Shipbuilders makes substantial profits. To some extent, those profits mask losses elsewhere and in merchant shipbuilding. With or without warship yards, merchant shipbuilding makes losses. Those losses will not go away or become any smaller because the warship yards stay within British Shipbuilders.
The corporation knows the position; Ministers know it and Labour Ministers in government knew it; and if Labour Members were in government again they would know the position, and would be bound to look at the losses on merchant shipbuilding standing alone. At all stages of the Bill, because I have wanted to lessen the anxieties expressed by Opposition Members, I have emphasised that merchant shipbuilding is at present unlikely to attract private capital I have also emphasised that the Government will, of course, continue to support merchant shipbuilding for the foreseeable future.
Our support for the industry and the merchant shipbuilding side has been substantial. The figures speak for themselves. Losses in the merchant shipbuilding division in 1981–82 were running at around £36 million. Last year losses on offshore were £14 million. Hon. Members will also be aware of the ship repair problems. Losses of £9 million were declared on ship repair last year. Many hon. Members will know from their constituencies of the action that has been taken on the Tyne. All that has meant a continuing need for Government support. British Shipbuilders has certainly had that from us—to the tune of well over £600 million since we came to office. Of course, it is never enough for Opposition Members, but it is substantial support and commitment by the Government.
Our support for the corporation has not all gone into the funding of losses. British Shipbuilders' capital expenditure has greatly increased under the Government. In 1981–82 it doubled. This year it will almost double again, and it is expected to rise further to £90 million in 1983–84. A great deal of that investment will be used to apply new technology—computer-aided design. It is in the application of new technology to a traditional industry such as this


that we have the best chance of facing competition from the far east about which we have understandably and rightly heard so much.

Mr. Dixon: The Minister says that the Government's investment in British Shipbuilders will offset competition from the far east. How does that square with the fact that the seven largest Japanese shipbuilders have already earmarked £626 million for investment in plant and equipment this year? That is almost six times as much as the Government intend to invest in British Shipbuilders.

Mr. Lamont: The hon. Gentleman interrupted me. I was about to say that even this level of support will not make the problems go away. British Shipbuilders will still be left in an extremely difficult position in the market. I am not saying, and did not say, that investment on this scale solves the problems faced by British Shipbuilders. All that I was saying was that the investment has been, contrary to the allegations made by Opposition Members in Committee, increased substantially, and it is only by doing that that we can hope to be competitive. It is not the only answer to our problems, but we must have that investment if we are to become competitive.
Another example of substantial investment is that planned at Vickers. It will make a substantial difference to that company. It will also make a substantial difference, quite apart from its commercial merits, to the conditions under which the work force operates at Vickers. I thought that they were remarkably depressing and difficult when I saw them. I had great sympathy for the people who had to work in such conditions. They will be improved substantially by the investment.
The shipbuilding industry faces a deep recession, and the 2,000 redundancies announced recently were a painful but inevitable and necessary response to the market. The Government are also providing help with the cost of redundancies through the shipbuilding redundancy payments scheme which has been extended three times since we came into office.
The House will be aware that British Shipbuilders has taken the line that any extra earnings this year must be related to real productivity gains. Sir Robert Atkinson has said that he will not ask the Government for subsidies for wages. It is a realistic response to the present crisis of significantly higher losses and a deepening shipbuilding recession. Sir Robert Atkinson is also right in assuming that the Government would not be willing to find money to finance wage claims which widen the competitive gap and make it even harder for the industry to secure orders. A responsible industry must have regard to itself and its actions as well as help from the Government.
As well as facilitating privatisation and giving greater opportunities to British Shipbuilders, we have used this legislation to tidy up certain provisions and remove others that struck us as unnecessary. Some anxiety has been expressed about the repealing of section 2(8) of the 1977 Act which requires the corporation to
promote industrial democracy in a strong and organic form.
In repealing this provision, there is no slackening of the Government's wish to encourage the development and maintenance of good industrial relations. Good though those industrial relations have been, I do not believe that

the legislative provisions had anything to do with them. They have been achieved by co-operation on both sides, and that is how they will be achieved in the future.
I appreciate some of the anxieties that have been expressed. However, I believe that the Bill holds out some opportunities for British Shipbuilders. First, it enables the promotion of joint ventures with the private sector. Secondly, it enables the introduction of private capital into parts of the corporation. It will also allow the transfer of certain activities to the private sector. I should have thought that every hon. Member would agree that the first two of those objectives were good. It is absurd that joint ventures and the injection of private capital are not allowed at the moment, or that there should be any doubt about it.
My hon. Friends and I believe that the third objective could create a shipbuilding industry that was more adaptable and competitive and therefore more able to generate viable, lasting and secure jobs. The history of nationalisation has been that it cannot preserve jobs. It can only delay and therefore probably increase job losses. We are not saying that the whole industry can, will or should be denationalised, but the Government say that Great Britain is unique in Europe in having a monolithic state corporation. France, Germany, the Netherlands, Norway and Sweden have shipbuilding industries that are either private or a mixture of public and private.
To have a conspicuously different structure could be justified only if we had a conspicuously more successful result, which we do not. For that reason, the Government believe that there is plenty of scope, even while building on what has been achieved in the past few years, for altering the balance between the private and public sectors in shipbuilding. There is an opportunity to allow a breath of private capital and enterprise into the state-owned industry. It is a modest but realistic message that we send today, and in that spirit I commend the Bill to the House.

8 pm

Dr. John Cunningham: I listened to the Minister with considerable interest, and, perhaps to his surprise, I welcome some of his remarks. However, although we may find words on which to agree, we certainly have no general agreement about the need for the Bill or its impact on the British shipbuilding industry.
It should have been no surprise to the Government, or anyone outside the House, that the Bill took such a long time in Committee. The Minister referred to it as a three-clause Bill, but it is, effectively, only two clauses as the third refers to its title. The fact that we took 16 Committee sittings to discuss the Bill is a measure of our fundamental opposition to its proposals. We regard the whole measure as an irrelevance, coming from a Government who are besotted with the idea of privatisation. They appear to be more concerned with that ideology than with industrial strategy or policies to end the massive crisis in the shipbuilding industry, which can only be heightened by the Government's proposals.
There is a deep and fundamental gulf between the Government and the Opposition about the proposals. We oppose the intention of privatisation, and also the type of legislation—an enabling Bill that takes away duties from a public corporation that were enshrined in the 1977 Act, and transfers considerable and wide-ranging powers to the Secretary of State for Industry. As we have said many times, if a Labour Government had taken upon themselves such powers, we would have attracted epithets such as


totalitarian and anti-democratic. Not only are such powers becoming a feature of the Government's approach to industry; they are not even subject to decisions by Parliament. One can be no more draconian than that. We are certainly opposed to that aspect of the Bill.
The Government are especially inept in their timing to be introducing the measure when there is such a manifest crisis not only in the British industry but throughout Europe. The Japanese and the Koreans are expressing anxiety about their shipbuilding capacity. Their total dominance of the world shipbuilding scene is well known to anyone concerned with shipbuilding and associated industrial activities.
The Opposition are not alone in opposing the Bill. On Second Reading—and again in Committee—we asked Ministers whether, at any time, the management of British Shipbuilders had sought such proposals. They failed to answer. We know the answer: that the industry—neither union nor management—did not ask for or seek any aspect, any scintilla or any shred of what is included in the Bill. So there is opposition there also.
Opposition comes not only from the industrial unions and the shipyard workers, but from the Shipbuilding and Allied Industries Management Association, the Merchant Navy and Air Line Officers Association and the Engineers and Managers Association. There is concern among the marine engineering equipment manufacturers about the likely impact of the Bill. In no way can the Government say that the Bill and its intentions have been widely welcomed, or gained support as the Bill has progressed. Indeed, it is not even clear whether those organisations that were previously the owners of the shipbuilding industry welcome the Bill. I shall return to that point later.
As my hon. Friend the Member for Thurrock (Dr. McDonald) pointed out, the position in European shipbuilding is causing grave concern, and the European Parliament has expressed strong views about that. The excess world capacity was discussed at some length in the context of policies for shipbuilding in the Community. The European Parliament expressed the view that our industry and its existing capacity should be defended. There is nothing to be gained by a further rundown, which would be on top of a major reorganisation of the shipbuilding industry in Europe, which has been accompanied by a severe reduction in capacity and a severe loss of jobs. I hope that the Commission and member Governments will take note of those views. Further large cuts in capacity would be counter productive. The inevitable outcome of privatisation will be a reduction in capacity, closure of shipyards and more shipyard workers on the dole.
I said that the Government appear to be besotted with the idea of privatisation. Certainly their rather touching adherence to the argument that market forces should be allowed to determine what happens in shipbuilding has no supporters. We do not accept that market forces are operating at the moment, and we are in rather good company in saying that. The Under-Secretary of State well knows what C. y. Tung, one of the largest shippers in the world, had to say about that. He was quoted in Lloyd's List on 10 February as saying:
For the first time in many years the C. Y. Tung group is not considering ordering new ships.
He went on to say in a number of almost throwaway lines that the offers that were being made to shippers to buy ships from shipbuilders worldwide were astonishing in their generosity.
The idea that market forces will resolve the situation and leave us with a shipbuilding industry is unreal. If we do not intervene and support shipbuilding far more effectively than the Government have, there will be closures, rundowns and redundancies, and major industrial communities will be torn apart. A truly frightening crisis faces our shipbuilding communities at the moment, particularly on the Clyde Tyne and the Wear, where the merchant shipbuilding yards are concentrated. The fear is expressed in the efforts of the county councils, the metropolitan district authorities and other authorities responsible for those communities, both by taking action themselves and by making representations to Parliament and to the Government, to stave off the disaster that they believe is staring them in the face.
In such a situation, it is lunacy to talk about introducing private capital or selling off part of the shipbuilding industry. I cannot bring myself to believe that the Minister of State believes that, in the current worldwide crisis in shipping and shipbuilding, he will be able to persuade people to invest substantial sums of money in British shipbuilding. All the evidence, not only at home but internationally, suggests that it is highly unlikely if not impossible that he could do so.

Mr. Robert C. Brown: Is it not likely that the only area in which private capital could be encouraged would be in naval shipbuilding? Would not the selling off o f naval shipbuilding, which is the only area of shipbuilding that is guaranteed to be profitable, spell doom for yards such as Swan Hunter on the Tyne?

Mr. Cunningham: I agree with my hon. Friend.
The view of the chairman of British Shipbuilders, who was appointed by the present Administration, is that the integrity of the industry should be maintained. He believes that that is the best guarantee of our maintaining a capacity and capability in shipbuilding, in the national interest. That is the view of the chairman and, I believe, of the board as a whole. It is also the view of the unions in the industry and a view that Labour Members unanimously share. The proposal to hive off, privatise or break up the corporation will spell disaster for major shipyards. The irony is that Swan Hunter on the Tyne is not only our foremost merchant shipyard but one of our most important warship building yards. It is the largest mixed shipbuilding yard in British Shipbuilders.
Despite the current crisis, the corporation is still working extremely hard worldwide to find orders and doing what it can to keep men employed, but it believes that the outlook for merchant shipbuilding is bleak and it is difficult to dissent from that conclusion. Against that background, the Government and the House must surely agree that every order is vital to keep people at work. It is therefore astonishing to learn, as we did a few days ago, that the CEGB has been a party, directly or indirectly, to the placing of an order, using British taxpayers' money, with a Korean shipyard.
A large number of questions remain unanswered. Flow did ITM of Teesside come to be involved in the first place? I believe that the competence of that organisation is questionable, as is the manner in which it claimed that BS had been invited to tender—a claim subsequently refuted by the corporation chairman. We must therefore conclude that the truth has not been told in this matter. I lay that charge not against Ministers but against ITM.

Mr. Dixon: Lloyd's List of 3 February referred to that order going to South Korea in the following terms:
A spokesman for Sunderland Shipbuilders said: 'ITM did not ask us to tender. We have heard that the order for the barge is now being placed with a Korean shipyard and everyone here is extremely angry."'
That is contrary to what the Secretary of State for Energy told the House a week or so ago.

Dr. Cunningham: I believe that the Minister was acting in good faith when he said that. I believe that he, like BS, has been misled.
The matter goes further. I received a communication from the managing director of a Hampshire company specialising in navigation systems and underwater instrumentation. I shall not quote the whole of his long letter, but it shows how Britain is losing business. He said:
After many months of discussions and expensive preparation, my Company tendered for designing and manufacturing the highly specialised underwater acoustic navigation equipment required to guide the Trenching Machine which buries the cable laid by the vessel in question. We lost to a French Company, who are our arch-competitors world wide.
My grievance is that the whole business was totally mismanaged by the Company to whom the CEGB had delegated the task of investigating and specifying the required equipment. Although guided by detailed proposals from ourselves and at least one other British Company … the gentleman in charge managed to produce the most un-professional specification I have ever seen in my life. The terminology was grossly inaccurate and obviously biased towards the French in that he described some of the equipment required usind the trade name adopted by the French Company!
That is the view of the managing director of one of our marine equipment manufacturing companies on this whole sorry business. I do not quote the name of the company simply because I was unable to contact the man who wrote the letter, although I spoke to his secretary today.
I am told that it is possible that another public corporation—British Nuclear Fuels Ltd.—will place an order for a vessel with a Japanese yard. The Minister of State shakes his head. I am pleased that he does so so spontaneously, as it would be the most grotesque insult to the shipbuilding workers on Tyneside and Wearside and throughout the corporation if another public sector order went to a foreign yard, to be paid for with taxpayers' money, while thousands of our own shipyard workers face life on the dole.
I said that I might be able to welcome something that the Minister of State had said. I welcome what he said about the external financing limit of BS. I am not so sure that the Prime Minister will welcome it, or that his own right hon. and hon. Friends will be very happy about it. Nevertheless, it is a sign that the Government are beginning to face the reality that if we intend to maintain a shipbuilding industry in this country we shall have to pay for it. Whether the Government like it or not, that is the reality of the position.
Opposition Members are in no doubt that Britain should be paying whatever is appropriate to maintain a shipbuilding industry. Britain is a maritime nation. The Opposition believe, as we said when moving the new clause in Committee, that there should be a national maritime strategy. Although it is rapidly declining, Britain has a large merchant fleet which played a vital part in the Falklands campaign. Britain has the largest navy in western Europe. That is a major factor in NATO. In the debate on defence, the remarks of my hon. Friend the Member for Thurrock about the Opposition amendment must have totally escaped the Minister. We would

abandon the Trident programme and invest in conventional defence forces. That is a far better guarantee for our shipbuilding industry than the Trident programme will ever be.
Britain, fortunately, is a country with a major oil province offshore. The requirements of our oil and gas fields will necessitate a capability for vessels and modules. Of course, they should be built in British shipyards. Britain still has a fishing industry. Public sector industries such as the CEGB, British Nuclear Fuels Ltd. and the British Steel Corporation use merchant vessels. In any other country in Europe there would be absolutely no doubt as to where those contracts would be placed. They would be placed in that country's yards.
My hon. Friend the Member for Jarrow (Mr. Dixon) pointed out in Committee that, of the EC countries, Britain has the worst record for building national vessels in its own yards. In Italy, France and West Germany 90 per cent. of all orders are built in their own yards. In Britain I regret to say—I speak from memory—the figure is less than 50 per cent. That is a measure of the difference in approach between our European partners and ourselves. It is nothing to do with market forces. Let us be clear about that. This issue concerns policies for maximising industrial advantage. That is the approach that we should adopt in the development of a maritime policy.
The Government seem indifferent to the future of some of our shipbuilding communities and quite willing to accept a further decline in our industries. I am told—and I shall be interested in the Government's response—that the permanent secretary at the Department of Industry was instructed to tour the country to talk to the former owners of the shipyards and to inquire whether they would be interested in either putting capital into the industry or buying back their assets. This took place at about the same time that the Government were facing a claim from the same people at the Council of Europe in Strasbourg for increased compensation following the Aircraft and Shipbuilding Industries Act 1977. There is an air of unreality about all this.
I have a copy of the press notice following those deliberations in Strasbourg. On page 3, it says:
The respondent Government"—
that is Her Majesty's Government—
maintain that Article 1 of the Protocol does not, either expressly or by implication, guarantee a right to compensation in case of nationalisation of the property of a State's own nationals. The nationalisation of the relevant companies on the terms laid down in the 1977 Act was a lawful measure which the Government of the time were entitled to take"—
that is the previous Labour Government—
and did not involve any breach of the Convention requirement that deprivation of property be in the public interest. They"—
this Conservative Government—
maintain that the compensation was assessed in accordance with the compensation provisions of the 1977 Act, which provisions met the international law requirements of adequate, prompt and effective compensation even if, contrary to the Government's contention, such requirements applied to the applicants, as United Kingdom nationals.
The Government have been saying, first, that there is no right to any compensation and, secondly, that the compensation paid was adequate. At the same time, the permanent secretary has been despatched to talk to these people about—

Mr. Norman Lamont: I am sure that my hon. Friend the Under-Secretary of State will say something more and at length, but I should point out that the press release that


the hon. Gentleman has read out does not represent the Government's views or the views that they advanced in the case.

Dr. Cunningham: I was about to come to that point. The hon. Gentleman has made an interesting challenge about what is written in the document. The document is official, and I should be happy for the Minister to look at it in a moment. It is headed "Council of Europe press release". It is printed on official headed paper and sets out the conclusions of the deliberations in Strasbourg. If they are not the conclusions, or if the Government do not accept that they are the conclusions, they should tell the House their real position.
I think that it was in August 1980 that the previous Secretary of State for Industry, the right hon. Member for Leeds, North-East (Sir K. Joseph), said in public—in Committee, in the House, and elsewhere—that the compensation paid was unfair and inadequate. I understand that that view has recently been reitereated by Ministers. However, in the Council of Europe, the Government have apparently been telling an entirely different story in defence of their case. That demands some explanation. We maintain that the compensation paid was fair and adequate and the Government have apparently been agreeing to that in private but denying it in public.
But what of the taxpayers' interest now? The Government are trying to privatise the industry and to obtain a fair price for the taxpayers' assets and investments. They have argued in Strasbourg that there should be no change in the previous compensation terms, while at the same time saying publicly that they were inadequate. What price will the taxpayer get for British Shipbuilders against that background of confusion and—I shall withdraw my next remark if it is unparliamentary—duplicity? Some double talking is apparently going on. The outcome of all this cannot possibly help to obtain a realistic price for the taxpayer from the disposal of any assets. Once again, following Amersham International, Britoil, and Associated British Ports, there is likely to be a fiasco in the handling of public assets because of the Government's attitude to privatisation.
I reiterate our view that the Bill is an irrelevance to the position, problems and future of shipbuilding in Britain. It has increased uncertainty—no, it has increased fear in the shipbuilding communities since its introduction and throughout its consideration. It has destroyed the confidence of potential customers for vessels, particularly since it has been demonstrated that the Government cannot even ensure that in the public sector orders go to British yards.
It is enabling legislation but its provisions will be used to break up the British Shipbuilders. Let the buyers beware. Let there be no doubt in the House and outside in the industry that the next Labour Government will recreate a publicly owned shipbuilding corporation in the national interest as part of a maritime strategy for Britain.

Mr. Hill: To clear up one point, I was in Strasbourg when the case was presented by the former owners of Vosper Thornycroft, Southampton, to the European Commission of Human Rights. After long deliberations, with both sides presenting their cases, the Commission

said that there was a case to answer. It only went as far as that. We must not read more into it than is there. The case will go on for some time. The process in Strasbourg is not famed for speed. The Government will present their case and at the end of the day obviously will take cognisance of the finding of the Commission.

Mr. Lamont: What my hon. Friend has said is right, but he might also like to know—because it relates to what the hon. Member for Whitehaven (Dr. Cunningham) said—that the Government have not been arguing that adequate compensation has already been paid when they said that some companies were treated unfairly. What the Government are arguing before the Commission is that the compensation arrangements under the 1977 legislation did not involve a breach of the convention or international law requirements. That is the position. My hon. Friend will understand that I cannot say a great deal more about it.

Mr. Hill: Having put that on record and having been supported by the Minister, I hope that the Opposition will realise that that is one red herring that they can pull in. In the next Parliament we shall still be discussing the court case in Strasbourg.

Mr. Harry Cowans: The hon. Gentleman will do it from the Opposition Benches.

Mr. Hill: It will be discussed on both sides of the House.
The Southampton interest in the Bill is twofold. We have Vosper Thornycroft, the warship building division, and we have the very able firm of British Ship Repairers of Southampton. During the Falklands campaign British Ship Repairers did not get enough prominence for the work it did. One of its convenors pointed out to me that it was always reported that Vosper Thornycroft had done the ship repairs. To the public and sometimes to the journalists from the local newspapers the two firms did not appear to be separate. Therefore, it is right to make a public acknowledgement here of the able work that British Ship Repairers of Southampton did to keep the merchant fleet and the warship fleet in readiness, to convert ships into hospital ships, and to provide helicopter pads where necessary. It was a tremendous effort. The enabling Bill will have a direct effect on British Ship Repairers of Southampton.
Vosper Thornycroft, if British Shipbuilders considers that it is a subsidiary that can be formed, will he most attractive to private capital, to be sold off as a subsidiary company or to become a joint venture. I should like to see private capital going into Vosper Thornycroft (Woolston) Southampton because it desperately needs more orders and more modernisation. The attraction of private capital with the obligation that this will bring increased efficiency and make the yard more commercially orientated can only do good.
Joint ventures are a different animal. I should hate to think that either of the two hon. Members representing Southampton would ever push a joint venture. On the other hand, the former owners of Vosper Thornycroft (Woolston) Southampton might be interested, especially if there is the promise of some compensation following the court hearing in Strasbourg to enable them to purchase back Vosper Thornycroft Warship Builders, Southampton. The yard has an excellent record as naval


warship builders. It has built for the Brazilian navy. It has been successful in winning some magnificent orders. Unfortunately, its research, development and design work for the warship division of British Shipbuilders is done almost entirely in Southampton. This represents an added cost that is not always recognised by other warship yards within British Shipbuilders.
Vosper Thornycroft's lifeblood is the occasional Ministry of Defence order. With an order for a type 22 frigate, or perhaps two, it would once again be able to build its business from a firm base. As a yard, it is interested in defence and security. It is involved in high technology and keeps up to date with progress on weaponry. Indeed, in defence and security, the yard cannot be topped. When national interest or national security is threatened, Vosper Thornycroft is the first to put its efforts and its work force at the disposal of the Government.
The hon. Member for Whitehaven (Dr. Cunningham) wondered why Italy achieved so many orders. The first report from the Select Committee on Trade and Industry on British Shipbuilders contains on page 103 complete coverage of all the subsidies that operate in Europe. I shall not weary the House with the details. It is shown, however, that Italy has a combined subsidy on merchant shipbuilding of 55 per cent. while we, in the United Kingdom, although the figures might be a little out of date, have a combined subsidy of 37 per cent. The report relates to the 1981–82 Session. It is, however, clear that the reason for Italy achieving so many home market orders for merchant shipbuilding is associated with the 55 per cent. subsidy.
As a pro-European, I sometimes think that the competition policy in the European Community is very restrictive of our traditional industries. Perhaps we did not get into Europe early enough to play our part in laying down the ground rules. We, being the high-minded people that we are in government, abide by every rule in the book, and sometimes we as a Government are criticised because we do that. However, there is no way round it.

Dr. John Cunningham: The hon. Gentleman is making a telling point. He is really saying that other European Governments do more to support their industries than his Government do.

Mr. Hill: I do not think that I would ever say anything quite as blunt as that, but it is common knowledge in the Lobbies here that some of our European partners do not always play the game according to the rules, and that sometimes they cut corners, especially in steel production and shipbuilding.
However, that is not the complaint this evening. The Opposition complain this evening that, at long last, this enabling Bill will enable the chairman of British Shipbuilders to come forward with schemes to form subsidiary companies to do what he can to make his conglomerate—because that is what it is—more efficient. I am sure that the House will respond at the end of this debate with an overwhelming vote in favour of the Bill.

Mr. Willey: The Minister spoke about a deep recession. My hon. Friend the Member for Whitehaven (Dr. Cunningham) talked about a crisis. It is not only a

crisis, but it is a crisis that has got far worse since we began our discussion of the Bill. We can be fraternal and say that world shipbuilding is suffering a crisis. We can be fraternal and say that Europe is suffering a crisis. We can read about what is happening in Germany, Sweden, France and Spain, but it is no comfort to us. We have to look at our present crisis, particularly in the form of redundancies.
Shipbuilding is an assembly industry, and we should realise that more than half of the costs of a ship come from outside the yard. We have to double the redundancy figures to see the true figures in areas such as the north-east coast.
We are told that we are following the policy on steel: "We are shedding workers, but we shall save the yards." We shall see. We must realise that not only has the crisis worsened since we began our discussions, but that the Bill has contributed to the worsening of the crisis.
My hon. Friend the Member for Jarrow (Mr. Dixon) and others spoke about industrial relations. There is no doubt that industrial relations have worsened as a result of the steps that are being taken in the Bill. It is equally true that this Bill has greatly aggravated the problems of merchant shipbuilding. It has jeopardised merchant shipbuilding, and that is why it has particularly affected us, and why we have four Members who represent the north-east coast on these Benches now. We have reached almost the minimum capacity that we can carry in merchant shipbuilding. We have only five yards left, of which four are in the north-east. In fact, one is a mixed yard—Swan Hunter.
One matter that I raised in Committee, and I raise it again, concerns Mr. John Parker. He was the principal person involved in merchant shipbuilding. I complained that he went to Harland and Wolff. He not only went, but it is now agreed that he went by Government request. British Shipbuilders now says that it was obliged to accede to that request. I want to know where the priorities lie. The north-east is the main area for merchant shipbuilding in Britain but that is what has happened. We see our calamities being aggravated.
The position in the north-east is extremely serious. It has been described as frightening and it is. At the moment, the problem centres upon Sunderland Shipbuilders, but again we can see what is happening. I welcome the appointment of Mr. Hubert Rice on the forthcoming retirement of Mr. Derek Kimber, but it is significant that Mr. Hubert Rice is to be chairman of Swan Hunter. One would have thought that at the moment his interest should be centred on Sunderland Shipbuilders. Tributes are paid in Sunderland to the work done by British Shipbuilders in what was Doxfords but all that is at grave risk. Shortly we shall be told that we are saving the yards, that they are being mothballed. That has already happened in Sunderland. It will be no comfort to us if we lose a yard. That is the position that we face in the north-east. It is a grave and alarming position and something must be done about it.
There are many priorities with which the Government should deal other than the Bill. There are many things that should take priority over privatisation. I was glad to hear the Minister of State mention the £90 million, which is important to investment in new equipment systems. We need to concentrate on marketing, particularly since Mr. Parker has gone. We want to improve export credit guarantees. We want—I emphasise this and it is the view


of the shipowners—more generous credit terms for United Kingdom shipbuilders. That is urgently needed now. We must have some help and some British orders placed with our yards rather than see them close.
We want, as I argued on Second Reading and as I have mentioned time and again—some action following the Falklands war. We want a strategic merchant fleet with defensive aids. That should be considered and decisions should be made and the work should be placed with British shipyards. We need a better system of flexible financial packages—I have had experience of that over the past few months—for Third world countries. I know all the difficulties but we must tackle the problems and improve the position. We must look seriously at the public support that is given to shipbuilding in comparison with what has been done in other countries. The Minister of State says that we are in the middle of the road, as though that is an answer, but it is not. We know Italy's policy on shipbuilding which it has followed for 30 or 40 years. I welcome the £160 million, but we must see that we get comparable public support and use it to the best advantage. As I have said scores of times now, we must deal with Korea, Taiwan and the far east. We must show that we will not put up with the present position and, if necessary, we shall take steps unilaterally. We must say that it was nonsense that last year they cut prices by 30 per cent. It is nonsense that they have been allowed to expand the shipbuilding industry at a time of world crisis.
We must pay attention to the evidence of the Trade Union Congress to the Select Committee about the conduct of nationalised industries in placing orders and get that matter cleared up. I agree that it is muddled but it seems frightful that it should ever have happened. I do not wish to be controversial. I wish to give the maximum possible support to this basic industry.
I conclude by agreeing with the hon. Member for Tynemouth (Mr. Trotter). He is not present—he is probably in Korea or Taiwan. He said on Second Reading that we should recognise that our national interest lies in the Merchant Navy, and that we need a shipbuilding capacity to enable us to maintain it. After the Falklands war, that should be readily recognised. These are two great national assets without which we cannot survive. I hope that this debate has removed the irrelevance of privatisation and has emphasised the serious position that faces British shipbuilding today.

Mr. Colvin: It is a pleasure to follow the right hon. Member for Sunderland, North (Mr. Willey) whose utterances in Committee have been particularly interesting. On the whole, we have enjoyed the deliberations of the Standing Committee. Notwithstanding some of the political views that have been expressed, it has been interesting to hear at first hand from hon. Members who have had lifelong experience in the shipbuilding industry. If nothing else, we have come out of Committee a great deal more knowledgeable than we were when we went in.
I am sorry that my hon. Friend the Member for Tynemouth (Mr. Trotter) is not present this evening.

Mr. Willey: I am obliged to the hon. Gentleman for giving way. I regret to hear that illness has prevented the hon. Member for Tynemouth (Mr. Trotter) being here. We all wish him a speedy recovery.

Mr. Colvin: I am grateful to the right hon. Gentleman. He has taken the words out of my mouth. I shall not repeat them, but I endorse his thoughts.
It has been suggested by many people that this has been a long Committee stage for a Bill with only three clauses, but page for page, it has not been anything like as long as the original Aircraft and Shipbuilding Industries Act 1977, which took two years from First Reading through to Royal Assent. Page for page, we have done a faster job.
My hon. Friend the Minister of State in his opening remarks was quite right to remind the House that the Bill is only an enabling measure. There is no ideological rush to denationalise the shipbuilding industry. To sell off the whole or part of British Shipbuilders or to introduce private capital presupposes that there are buyers around or people who will be interested in investing in that industry. As the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said, nobody in his right senses would do that at present. The hon. Gentleman is probably right because in part or in whole British Shipbuilders does not look an attractive buy.
Nevertheless, that is no reason for not passing this enabling legislation. I was glad to hear from the opening remarks of my hon. Friend the Minister of State that, in spite of the time that will elapse between now and the beginning of privatisation, Government financial support for the industry will continue. That is, indeed, welcome news.
I was interested in remarks of Opposition Members about the apparent ease with which they think the warship builders could be privatised and I should like to take up the remarks of the hon. Member for Whitehaven (Dr. Cunningham). I did not read the press statement from which he quoted but I did see a report in The Times this morning relating to the approaches that are being made by the Department of Industry to the original owners of the warship building companies with a view to perhaps sounding them out on repurchase.
According to the newspaper report, the previous owners have asked for two assurances. Perhaps the Minister will comment on them and let us have his views. The former owners, who are probably the most likely buyers of the warship builders want, first, improved compensation for their assets which were taken over by the Labour Government in 1977. I sympathise with that and endorse what the previous Secretary of State for Industry, my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said on the matter when he commented that the original compensation payments were grossly unfair. We know that as a result there are now nine separate applications before the European Commission of Human Rights. I gather that the commission has ruled that some of those applications are admissible. However, a comment on the matter from the Minister would be welcome.
The second assurance that the former owners have sought is that adequate compensation will be paid if a future Labour Government were to renationalise. The hon. Member for Whitehaven said that that was part of Labour party policy, but he was careful to exclude any remarks about compensation. Perhaps the hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) will comment on that matter when he winds up as it is important and will no doubt influence potential buyers.
I doubt whether those two assurances can be given, so I also doubt whether the sale of British Shipbuilders in part or in whole, not even the warship builders, can be a


foregone conclusion. Most certainly it will not proceed with haste. However, that is no reason for not passing this enabling measure.
The best analogy with this measure which illustrates the realistic attitude of the Government towards the policy of denationalisation that they are pursuing is surely the Civil Aviation Act 1980, which provided for the introduction of private capital to British Airways. There has been no rush to privatise British Airways. The enabling measure has concentrated the minds of those in the corporation, both management and employees. That has had an immediate effect on productivity. If this Bill is passed, it will have a similar beneficial effect on both management and employees in the various parts of British Shipbuilders.
Before one can sell part or whole of a company one has to be able to write a prospectus. Before one can write a prospectus, one has to be able to show a profit. Before one can make a profit, one has to be competitive. We should give credit to British Shipbuilders for the way in which it has increased productivity and competitiveness over the years. It is true that it has reduced the number of bargaining units from 168 to only two. It is true that it has cut out leapfrogging and that demarcation disputes are now a thing of the past. It is true, alas, that 25,000 jobs have gone. It is true that it now has central wage bargaining. That is good and splendid. However, it does not take legislation to bring those things about. I was interested in the remarks that were made on clause 1, when it was assumed that, by passing a law, one would make people realistic and improve industrial relations and productivity.

Mr. Cowans: Will the hon. Gentleman tell the House that all those improvements, all the good industrial relations, all the investment and all the advanced ideas happened only under nationalisation? None of them occurred under private enterprise.

Mr. Colvin: Nationalisation was coincidental with the start of a world recession. I believe that it is the feeling of realism among management and workers in British industry, rather than the ownership of the firms concerned, that has brought about the improvements to which the hon. Gentleman referred. Since the second world war we have had five men doing four men's work. In the past three or four years, the fifth man has gone. In labour terms, we are now competitive.
I shall return to my analogy with British Airways and the problems of privatisation. With British Airways, it was never thought that privatisation was possible. That is why passing an enabling measure such as this concentrates the minds of those who are involved. It hastens higher productivity and improved profits.
British Shipbuilders can survive, either in part or in whole, whether state-owned or owned by private shareholders or, perhaps, a combination of both, only if the world shipping industries are healthy. We know that there is a vast overcapacity of shipping in the world today. An enormous tonnage is laid up. We know also that the British share of world shipping is shrinking as other maritime nations emerge.
However, there are still healthy sectors that are growing. For example, offshore vessels are still in demand and being built in British shipyards. The high technology ships for which we have a high reputation are still in demand and we can win orders for them. Unfortunately,

with regard to the very large crude carriers, what The Sunday Times said on 15 February is true—Korea rules the waves. However, Korea will rule the waves only for as long as it is making a profit out of building those ships. Korea will soon decide that it does not want to go on making ships any longer when it no longer makes a profit. That will happen when China starts to build ships. The competition from China will drive Korea out of business, and China is not exactly renowned for its freedom, industrial democracy, or care about profits and profitability.
We must not conclude this debate on a note of utter gloom and despondency. I welcome the Minister's statement about the increase in the intervention fund. That at least is good news. I endorse what the right hon. Member for Sunderland, North has said—the need for more help remains. To know what help we should be giving our shipbuilders and shipowners, it is vital that we find out what other countries do. At the moment, there is no proof of the financial incentives and help given by other Governments either to their shipbuilders or to their shipowners. Until we have solid facts we cannot plan the measures of support that we should be giving.
We must re-examine a scrap-and-build policy whereby we scrap two ships for every one that is built. I was glad to note a reference in Lloyd's List the other day to the international maritime industries forum which is examining a scrap-and-build policy once again. In that, there is some hope that we can get the type of help that our shipbuilders require.
The Bill fulfils a commitment by the Conservative party to reduce the role of the state where possible. It is based not on dogma, but on common sense, and if enacted it might open up new prospects for an important national industry.

Mr. Ernie Ross: The Third Reading and Committee stage of the Bill demonstrate the lack of a concerted effort by the Government to come to grips with an industry in a severe crisis. The Opposition, which have a different approach to nationalised industries and to British engineering, have a responsibility to make clear those differences. Although we may welcome some of the Minister's comments we must put on record the different strategy that we would have adopted had we been in power, and that we will adopt when we are returned to power after the next election.
It is an essential objective of every trade union to defend the industry in which its members work. If there is no industry, there will be no members and no wealth to support our people. The Government are determined to de-industrialise the nation that gave birth to modern industry. Many Opposition Members have experience in shipbuild-ing and other industries. Some hon. Members are sponsored by trade unions that have promoted the idea of defending British engineering, not from chauvinism but from patriotism. Moreover, that is a vital demand of those who work in the industries, and it is in the interests of those whom we represent.
The Government have introduced the Bill for ideological reasons that are as relevant to the modern world as are leeches to modern medicine. It has nothing to do with resolving the problems of British engineering


and, more important, British shipbuilding, but supports the Government's contention that on some distant, undeclared day everything will come right.
One need only read the speeches of my right hon. and hon. Friends in Committee to see that the Bill is unnecessary. It is an attempt to privatise and it cannot work. If the enabling legislation reaches the statute book, the weaker yards will be abandoned or will collapse and even larger Government subsidies will be required if they are to survive. If the specialist yards were hived off they could not meet delivery dates without the assistance that they receive from the present mix in British shipbuilding. It is a mystery how a change in ownership of a yard would enable it to compete more effectively in world markets. It would have to reduce costs dramatically, and improve delivery dates and productivity or it would need major capital investment, which is hardly likely with privatisation. It would require the co-operation of the trade union movement, which increasingly expresses concern about its role in the industry. The Government believe that the trade unions should accept low wage increases and job losses without long-term security. If the industry is handed back to those who brought it near bankruptcy, trade union co-operation is unlikely.
Furthermore, British Shipbuilders' centralisation of research and development has cut research duplication and wasteful multiple estimation in tendering. Privatisation is not in the commercial interests of British shipbuilding, the employers or the employees. An integrated industry can better survive the world shipbuilding crisis.
British Shipbuilders has the ability to build warships, Polaris submarines, computerised frigates, trawlers, pilot boats, tugs, feeder ships, coasters and fishing patrol vessels. Hiving off will only divide the work force who would be competing with one another. That would not be good for the industry.
I said in Committee, and I repeat, that the Government's determination to have privatisation has nothing to do with real interest in the industry. It has more to do with the Conservative party policy group report on the nationalised industries which was put together by the Financial Secretary to the Treasury. It was leaked in The Economist in May 1978. It has more to do with political dogma than any understanding of how British engineering works.
I am sponsored by a trade union—AUEW-TASS—which includes and represents many naval architects, engineers and designers employed in British Shipbuilders. During nationalisation I fully supported the building up of specialised teams. Privatisation puts at risk centralised control of materials, research, development and design for the corporation. British Shipbuilders has gained an advantage from the new technology that it was able to introduce following nationalisation. The advent of new technology has led to tremendous problems of adjustment—displacement of jobs, the obsolescence of many skills, the need to learn new skills and adapt to new working environments. All those problems were handled by the trade unions because they understood that it was their industry. The industry was nationalised not just for the benefit of the work force but for the country's long term benefit.
If the yards are hived off that interest is bound to receive a setback and the work force will not be encouraged to continue to work together so effectively. When one looks at British Shipbuilders' demands for quicker production,

engineering and planning, leading to advanced outfitting, detailed production scheduling, material control, greater control over suppliers and subcontractors, superior shop floor organisations with improved supervision of working practices, job flexibility, communication, information, tighter control of dimensional accuracy at all stages of production leading to the virtual elimination of re-work, involvement of shop floor workers as the first line in a quality control system, how will all that be achieved by this enabling legislation? How will the co-operation of the work force, which is so essential if these aims are to be achieved, be guaranteed if the industry is hived off?
The shipbuilding unions are clear about their specific demands. The CSEU says that it wants increased Government aid in both the short and long term. It wants the introduction of a scrap and build programme and financial incentives to British owners to buy British. It is important that the House realises that there is a change of mood at all levels of the work force. That change of mood is not taking place where we believed initially that it might when job reductionssss were asked for. We thought that when job reduction were demanded, the work force would refuse to accept them. After discussion, however, it decided that it would accept a reduction in the work force. The Government would do well to be aware of the change of mood. The workers in every yard in this country are against privatisation. They have accepted wage increases below the level of inflation over the past few years in order to remain competitive. They have had to accept the closures and redundancies to improve efficiency and productivity. The workers are saying that it is "not on" to give the industry back to those who brought it to the state of bankruptcy that existed when we nationalised it. The Government had better be prepared for the reaction in these yards if any of this nationalised industry is sold.
What has been the Government's role? Despite tonight's statement of an increased subsidy, their attitude shows little recognition of the serious crisis in world shipping. They constantly lecture the House and the shipyard workers. The Bill does nothing for the morale of the industrial team, which is united against it. They are also united in their determination to ensure that this island nation maintains a shipbuilding industry capable of providing for merchant and defence needs. The Government are wholly unsympathetic to the crisis facing merchant shipping. That is not unconnected with their lack of concern about merchant shipping orders.
I draw to the Minister's attention an article in The Scotsman of 16 February, and the comments of Jim Murray, the leader of the union side of the shipbuilding negotiating committee. He said:
God helps those who help themselves and, to be quite frank, at the present time with the policies being pursued by the present Government and British shipping interests, it is questionable as to whether or not we qualify for divine help. We make that: point perhaps in rather light vein, but in much more serious vein, we would illustrate the point much more forcibly—the replacement Atlantic Conveyor.
The world outside must have thought that as a nation we must have gone stark staring bonkers. If Government and shipowners can act in the way that they did on that very sensitive situation then our task and our joint efforts become that much more difficult.
My right hon. and hon. Friends have made it clear that we expect financial incentives from the Government. How do they intend to respond to that? We want not only financial incentives for the domestic industry, but easier


credit terms and packages for the developing world, which is anxious to place orders for ships in our yards but cannot raise the finance. It needs easier credit terms.
The intentions of the Bill are criminal. Instead of recognising British Shipbuilders as a national strategic industry, instead of examining how that industry—which has achieved so much with so little help—can be stimulated and encouraged, instead of trying to help British shipbuilding through a difficult period, the Government have decided to reward their political friends by putting up for sale yet another of our national assets.
The Bill is unnecessary. It makes no industrial or economic logic. It asks the House to believe a scenario that is a nonsense. No one will buy the non-profit-making yards. If the naval yards—Yarrows, Vickers and Vosper Thorneycroft—are sold, the remainder will collapse without massive Government finance. Yet again, the Government fork out to line the pockets of the Prime Minister's friends. The Bill will fulfil an election pledge. I challenge the Government to say tonight how privatisation will help the industry. Why do neither workers nor management support it? Why is it that members of all unions, including the National Union of Seamen, want completely different alternatives to the privatisation measure?
I doubt that the House will hear the answers to those questions. That is why I shall join my right hon. and hon. Friends in voting against this unnecessary measure.

Mr. R. C. Mitchell: I regret that the hon. Member for Southampton, Test (Mr. Hill) has temporarily left the Chamber. I wanted to congratulate him because at least one third of his speech was almost a word-for-word reproduction of my Second Reading speech. I congratulate him on reading it. If I have achieved something during the passage of the Bill, perhaps it is the conversion of the hon. Gentleman.
It is not my intention to make a constituency speech today as there will be other opportunities for doing that. I want to deal with the Bill as a whole. I shall advise my hon. Friends to vote against the Bill because it is completely irrelevant and does nothing whatsoever to tackle the underlying problems affecting shipbuilding today. It will not produce one more order for a merchant ship or warship. It is a piece of ideological dogma.
Both the Government and the Labour party seem obsessed with ownership. Privatisation has become a virility symbol for the Conservative party as nationalisation has been for the Labour party for many years. We are reaching the nonsensical situation in which one side nationalises and the other side privatises. Whether nationalised or privatised, the industry faces similar problems. The problems of management, getting orders, and competing against foreign shipbuilders are similar whether the industry is in public or private ownership.
I believe that the shipbuilding industry should remain in public ownership. I voted for public ownership in 1977, not necessarily taking the view of the majority of my shipyard workers who had grave doubts about it at the time. But now the morale of the workers, especially in the warship yards, is liable to be affected. Indeed, it has already been affected by the defence cuts and the fact that, because of the Government's defence policy, the workers

cannot see where future orders will come from. I agree that far too much is being spent on Trident and that more should be spent on conventional weapons.
The Bill will create another uncertainty. What is to happen? Are we to be privatised? Are we to be sold off or not? The only people who are never asked for their views are the workers in the industry. Nobody ever asks the workers whether they want to be nationalised or privatised.

Dr. John Cunningham: That is not true. The workers in the yards are consulted by their trade unions. I am sorry to hear fatuous laughter from the Government Benches. The trade unions have a far better understanding of how the shipyard workers feel about these issues than the Government have.

Mr. Mitchell: That may well be true, but that would not be difficult. It does not necessarily follow that, at any moment, the official line put forward by a trade union represents the view of the majority of its members. The trade unions are consulted, but not necessarily all the people who work in the shipyards. In 1977, I asked for a poll to be taken of the shipyard workers to find out whether or not they wanted to be nationalised. That is the only real way to achieve consultation.

Mr. W. E. Garrett: On the north-east coast, trade unionists are consulted at meetings held by the various unions. The facilities are there for them to attend. They attend in large numbers and discuss the issues, and the full-time officials take away the views of those members. That is the basis on which decisions are reached.

Mr. Mitchell: I am sure that a consultation process goes on, but the hon. Gentleman knows as well as the rest of us that not all trade unionists attend branch meetings. A relatively small proportion turns up to discuss things. There is therefore a case for consulting the workers in a different way. For example, the great majority of shipyard workers in the north-east may well have favoured public ownership in 1977, but that does not mean that the same necessarily applied in Southampton or elsewhere. However, I shall not labour that point.
The other reason why the Bill is thoroughly bad is, as I said on Second Reading, that it puts still greater power in the hands of Ministers. I dread to think of that power in the hands of some official Opposition Members who would like to be Ministers. I dread to think of such power in the hands of some extremely Left-wing potential Ministers. If it were in the hands, for example, of the right hon. Member for Bristol, South-East (Mr. Benn), I hate to think what the end result might be. The Bill takes power from Parliament and gives it to the Executive. More and more enabling Bills are doing just that and more and more real power is being transferred from this place to secret Cabinet rooms.
As the right hon. Member for Sunderland, North (Mr. Willey) said, instead of playing around with irrelevant Bills like this, Ministers should be working out a proper maritime strategy in consultation with Ministers from other Departments. The Falklands crisis clearly showed the need for a strong Merchant Navy sailing under the British flag. The number of ships sailing under the British flag falls every month. It also clearly showed that the Merchant Navy is the fourth service—the fourth arm of defence. A naval operation cannot be mounted without its


assistance. The Government should be considering that and deciding what kind of Merchant Navy we need and the kind of ships required. They should be consulting shipowners about how ships can be adapted. They should be doing all that instead of playing around with this Bill.
The Government should also be dealing with the problem of competition and considering how Korea manages to undercut this country so severely. I strongly oppose the CEGB placing orders in Korea, but purely from the taxpayers' point of view the cost of the ship will be considerably less than if it were built here. There is a considerable price difference, mainly because Korea is doing in shipbuilding what Japan has already done in many other industries—heavily subsidising to dominate the market. Once it has dominated the market, things may change, but that is how those countries operate. We always seem to take the Simon Pure attitude that we should not subsidise because it is not playing the game. The fact remains that all our competitors are doing just that.
I was alarmed at the speech of the hon. Member for Dundee, West (Mr. Ross), which showed all that is wrong with British industry today. The hon. Gentleman is still fighting the old class war.

Mr. Ernie Ross: Absolutely.

Mr. Mitchell: I am glad of that confirmation. The hon. Gentleman is still fighting the old class war, but British shipbuilding and British industry generally need the recognition that management and employees are not diametrically opposed but have the same objectives. If the industry is not profitable, there will be no jobs. It is a question of working together, not of automatic opposition. Until that feeling gets through to shipbuilding as well as to everywhere else, this country will not be successful.

Mr. Dixon: I wish to quote from the annual report and accounts of British Shipbuilders for the year 1981–82 when Robert Atkinson, the chairman of British Shipbuilders, summed up in a couple of sentences the position of Britain as a maritime nation. He said:
Britain as an island nation is, and always has been, a strong maritime nation needing sea power, and by necessity this must continue to be the case. Shipbuilding plays a vital part in our nation's prosperity and in its protection. We have a capability that needs to be sustained and recognised as a national asset because a shipbuilding capability is not something that can be used intermittently; to be available when required. To be effective it needs continuous use, it needs continuous improvement and continuous investment in men and materials; once that capability is allowed to disperse, it will not be recoverable. Shipbuilding, like shipping, is a national strategic industry and needs a declared national maritime policy. Britain remains one of the few major maritime nations in the world where the national requirements of shipping and shipbuilding are not linked.
Therefore, it seems to me reasonable that since we are required to be internationally competitive we should be able to rely on adequate Government support such as is received by all those overseas shipbuilders with whom we have to compete".
Since he has been chairman, he has served under two Secretaries of State for Industry and three Under-Secretaries of State for Industry. I have more confidence in his statements that I have in the Government Front Bench, from whom we shall shortly hear.
The Bill is irrelevant to the needs of the British shipbuilding industry. When we talk about competition, we are talking about international competition. To quote

Robert Atkinson again, this time in the November issue of Shipbuilding, he said, and I believe the hon. Member for Southampton, Test (Mr. Hill) referred to this:
There's no future in boxing by the 'Queensberry Rules' if your opponents are engaged in 'all-in wrestling'".
That is what happens to British shipbuilding when it competes with Korea, Japan and other far eastern nations.
The hivingoff of the warship yards from British Shipbuilders will do it harm. The merchant shipping section will, to use a pun, go down the Swannee. Britain will have no merchant shipbuilding capacity left if the warship yards are hived off. It is against the unions' advice, the advice of the chairman of British Shipbuilders and that of everyone concerned with ships and shipbuilding
The Minister spoke about introducing or inviting private capital into the shipbuilding industry. When the shipbuilding industry was in private hands it was unable to get private capital invested. There was the Paton report in 1962, the Geddes report in 1966 and the Booz Allen report in 1972. Those reports on the British shipbuilding industry talked of the lack of investment in the British shipbuilding industry. That is the reason why it was uncompetitive.
What is required is some help from the Government but the Bill helps in no way whatsoever. I agree with my hon. Friend the Member for Dundee, West (Mr. Ross), who spoke about the attitude of the workers in the shipbuilding industry. The Bill will cause confrontation. There has already been a conference. They will not accept the fragmentation of the shipbuilding industry. They will not accept the compulsory redundancies that the Bill may bring.
There was a Select Committee on Industry and Trade in the Session 1981–82, which interviewed the Confederation of Shipbuilding and Engineering Unions, British Shipbuilders, the Minister and Government officers and made recommendations. Not one of the recommendations is included in the Bill. Nothing that the Select Committee said is included in the Bill. The Bill will not help British Shipbuilders. It will only hinder it at a time when world shipping is in recession. Despite the requirements of shipbuilders and the shipping industry, the Minister has come along with a totally irrevelant Bill, which will cause only confrontation with workers in the shipbuilding industry.

Mr. W. E. Garrett: The hon. Member for Bristol, North-West (Mr. Colvin), who is not in his place, referred to the previous shipbuilding Bill, which took two years to go through its parliamentary stages. I was a member of the Committee that considered the Bill and I well recall the vigour with which the Bill was debated and the acrimony generated on both sides. The then Conservative Opposition were very keen when it came to defending their corner and the private sector.
The significant factor about our 16 Committee sittings and tonight's debate on this Bill is the subdued torte of Ministers and their supporters. In Committee, there was a fair bit of humour and some knowledge was gained, because we learnt much from my hon. Friend the Member for Jarrow (Mr. Dixon) about the problems of industrial relations and working practices in the industry and about some of the characters who worked in the industry. He enlightened many a long weary hour in Committee.
However, when Ministers replied to some of the points put in Committee they were polite and very low key for their temperament—I have seen them display a bit more vigour on other occasions—and at one point I wondered whether they had lost their passion for privatisation and whether something terrific might happen. I wondered whether the Bill would collapse and whether we would all be able to go home to think about it. However, that did not happen and we are now debating the Bill's Third Reading.
I refer the Minister to something that he said early in his opening remarks. He said that the Bill had freed British Shipbuilders from a straitjacket. That is not my impression. I am under the impression that any straitjacket has been replaced by a noose, which can be pulled at any time. When it is pulled, it will kill off British Shipbuilders. Depending on how it is pulled, it will kill it quickly or by slow strangulation. My hunch is that it will be slow strangulation. Either way the Bill could be fatal for the British shipbuilding industry. The industry could fall between the two stools of private and public sector and in the end both would collapse.
I am also at a loss to understand the Minister's quiet satisfaction with the EC's fifth directive, which approved a loan of £20 million for the first six months of this year. It is not the EC's money but our money. It is the British taxpayers' money. Why should it approve money that is raised by the taxpayers and which we should spend? The hon. Member for Southampton, Test (Mr. Hill) said that he was committed to the principles of Europe. If he is still a committed supporter now, we should pity him, because it shows an extremely closed mind.
I should like to reinforce two points. First, the labour force is demoralised. If any hon. Member doubts that, he should go to the north-east coast and see what is happening there. It is no good beating about the bush. One can see all the early signs of further industrial trouble. I warn Ministers that they will bear some responsibility. When industrial trouble breaks out, I hope that they will understand and have broad enough minds to realise that they had some part to play in the troubles that will inevitably come.
Regrettably the Government will kill off the industry if they pursue the division of responsibility instead of trying to heal the nation's industrial relations wounds. They should be bringing together sectors of industry instead of separating them. If they pursue this policy, more and more British industry will be destroyed. The only way that destruction can be stopped is by society at large being prepared to think out issues. If they do, they will reject some of the privatisation policies that have been advanced during this Parliament.
I do not like to be prophetic, but if any hon. Member thinks that this is the last Bill on the shipbuilding industry with which he will be involved in his parliamentary career he will be disillusioned. Whichever party wins the next election, there will have to be further legislation to iron out the anomalies arising from the privatisation of the industry. If the Conservative party were to win the election, the Minister of State and his colleagues might again be in Committee Room 10 or 11 explaining to us why privatisation created more problems for the industry. They will say that they tried it and it was not very good, so they are going back to a public or semi-public body.

The Minister may be in the same job. Perhaps he will be a grade higher. If he is, I shall be delighted to sit in the Committee and listen to him giving the explanations.

Mr. Harry Ewing: I begin by paying tribute to my right hon. and hon. Friends who served on the Standing Committee. We kept the Bill in committee for 16 sittings not as a mere exercise to demonstrate the length of time such a small Bill could be kept in Committee but because we regarded the Bill as so important. Throughout the debates on Second Reading, in Committee, on Report and now on Third Reading we have been told that this is only a paving measure, as though that was a minor thing. We have been told that there is nothing to worry about. If the Bill is so minor we are entitled to ask the Minister why the Government went to all the trouble of introducing it.
It was appropriate that the final contribution from the Opposition Back Benches should have come from my hon. Friend the Member for Wallsend (Mr. Garrett) who has in his constituency the biggest shipyard in the British Isles, apart from Harland and Wolff in Northern Ireland. He and my hon. Friend the Member for Jarrow (Mr. Dixon) have that intimate knowledge of shipbuilding that ought to have made Ministers sit up and take notice.
One of the significant features of all the debates is that we have had no response from Ministers to any of our questions. Ministers have singularly failed to produce anyone who is in favour of the Bill. British Shipbuilders is not in favour of it. To comfort the hon. Member for Southampton, Itchen (Mr. Mitchell), who was antagonis-tic to the "them and us" situation, I would point out that the Engineers and Managers Association, which represents the management of the shipbuilding industry, is not in favour of the Bill. None of the trade unions involved in the industry is in favour of it. Now we learn that the Government are in such great difficulty that they are sending the permanent secretary to the Department of Industry round former private owners to see whether they are in favour of it. It has become apparent that no one is in favour of the measure.
It was the hon. Member for Bristol, North-West (Mr. Colvin) who, at about 9 o'clock, gave the game away. The hon. Gentleman said that this was the honouring of an election promise. That is what the Bill is all about. It means that the Government can take the Bill to their annual conference and wave it to the well-bedecked ladies and other delegates, claiming that it is one more election promise fulfilled. I am sure, however, that the damage done to the shipbuilding industry in the process will not go unnoticed by the delegates who will face the consequences whenever the Conservatives meet in conference again. The one defence of the Bill is that it honours an election promise.
The Bill, as the Minister says, is an enabling measure. It enables a tremendous amount of damage to be done. It is a paving measure towards privatisation. Clause 2 will devastate the traditional shipbuilding areas, not least Clydeside. I hope that the Scottish Office Minister will address himself to this matter against the background of Sir Robert Atkinson's announcement last week that there will be an additional 30,000 redundancies in the shipbuilding industry. I hope that the Minister will say


how many of the redundancies he expects will take place in Scottish shipyards. The Bill will devastate the shipbuilding industries on Tyneside and Wearside.
The measure is irrelevant to the shipbuilding industry. It has already been argued that the measure will not produce a single additional shipbuilding order. That is true. It will do nothing to stabilise the maritime fleet that is in such difficulties. Much of the tonnage is laid up. The tonnage that is not laid up is engaged in slow steaming in order to save money. The Government have failed to come forward with any proposals to give additional credit or preferential treatment for those customers prepared to order vessels that are constructed in British yards.
Export credits guarantees are also important. These have not, however, been discussed. Debate has been only about the sacred policy of privatisation, the petard upon which the Conservative party has become hoisted. Before the hon. Member for Southampton comes back with his reference to my hon. Friend the Member for Dundee, West (Mr. Ross)—

Mr. Hill: On a point of order, Mr. Speaker. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) is actually addressing the hon. Member for Southampton, lichen (Mr. Mitchell). We do not always see eye to eye.

Mr. Ewing: Actually, I was itching to find out what constituency the hon. Member for Southampton represents. I recognise now that it is Southampton, Itchen and not Southampton, Test. The people of Southampton, I am sure, if they have studied the remarks of the hon. Member for Itchen will have great difficulty in distinguishing between the two hon. Members without my adding to the confusion. I accept therefore the strictures of the hon. Member for Southampton, Test (Mr. Hill).
Before the hon. Member for Itchen comes to the reference that he made to my hon. Friend for Dundee, West I should like to say that his approach to that question was a little simplistic. We are not dealing with an industry that has been nationalised for many years. We are dealing with an industry that was in private hands until 1977. During the time that it was in private hands, as the hon. Member for Itchen knows well, labour relations were a disgrace. The whole industry was a shambles. It was almost bankrupt. That was the reason that the hon. Member for Itchen, then a Labour Member, supported the then Labour Government in taking the shipbuilding industry—I leave aside for a minute the aircraft industry—into public ownership.
The industry has been in public ownership only since 1977. Therefore we are entitled to compare its performance when it was in private hands in recent years with its performance when it was in public hands in recent years. It is not a "them and us" situation. The record proves conclusively that the industry was much more successful during its period of nationalisation. It is not a diplomatic argument. It can be proved conclusively that the industry was much more successful under public ownership than it was under private enterprise. In the halcyon days under private enterprise, when the industry made substantial profits, the great weakness was that the people making the profits were not re-investing. Major investment in the industry and its modernisation have taken place since 1977, when it was nationalised. It was all done with the co-operation of the work force which, as

the hon. Member for Bristol, North-West rightly said, accepted 26,500 job losses during that period. Now the work force is threatened with this privatisation measure, which tosses to the winds all the efforts that have been made since 1977. There is a complete lack of concern on the part of the Government at the damage that will be done to the industry when this measure reaches the statute book.
The Minister of State opened his remarks by saying that the Government are attempting to attract private capital into the industry. However, he forgot to explain the change that the Government made to the Bill in Committee, whereby those who are buying part of the industry will be indemnified. They will be underwritten by the taxpayer until the contract is completed. Those who are concerned about the taxpayer are concerned about the underwriting of these orders. If any of the subsidiaries is sold off, the orders sold with that part of the industry will be underwritten by the taxpayer until the contract is completed.
The Minister need not bother to point to his watch. We are talking about 30,000 lives which are at stake. It is not a trivial matter. We are talking about the families and the lives of 30,000 people in the shipbuilding industry. We shall not cover that subject in a few brief minutes.
Not only are the orders to be underwritten by the taxpayer, but any contract that is made in the period between now and the Bill reaching the statute book, and then sold to private enterprise, will also be underwritten, under clause 2. Whatever the Government say, the Bill is a shining example of bungling incompetence in its drafting, its implications, and everthing that it does to the shipbuilding industry.
I shall not detain the House, but I do not want to avoid the question that was put by the hon. Member for Bristol, North-West about compensation. Before facing that question head on, I want to say to the Under-Secretary who is to reply that he is under an obligation on behalf of the Government to clear up the matter that is before the European Commission of Human Rights. The Minister of State has not cleared up the matter. The Government take the view that under the compensation provisions of the 1977 Act the then Labour Government acted correctly. That is accurate as far as it goes, and that is what the Minister of State said, but page 3 of the document, to which my hon. Friend the Member for Whitehaven (Dr. Cunningham) referred, says that the Government consider that the compensation was adequate. If the hon. Member for Bristol, North-West, is correct in saying that those companies that are thinking of buying back part of this industry want additional compensation for the assets that were nationalised in 1977, the Minister has an obligation to say whether the Government are prepared to meet that demand. That is not an unimportant matter and it must be answered by the Minister when he replies to the debate.
The Labour party's position is clear. We have made it clear before and make it clear again tonight. No one, but no one, will make any profit from buying these assets. The Labour party has never confiscated anything but we are making it clear that anybody who buys any assets from British Shipbuilders will have those assets reacquired by a future Labour Government and will not make any profit from them.
In conclusion, the Bill, as has been said so often, is an irrelevant measure. I invite all right hon. and hon. Members to join us in the Lobby in voting against the Bill on Third Reading tonight.

Mr. Alexander Fletcher: The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) has shown his usual courtesy towards the House by ignoring the agreement on the wind-up speeches. It is not the first time that he has done that and no doubt he will try to do it again.
There has been the tiniest chorus—

Mr. Harry Ewing: rose—

Mr. Speaker: Order. The House is anxious to come to a decision after hearing the Minister.

Mr. Ewing: On a point of order, Mr. Speaker. I would not have raised a point of order had my integrity not been impugned by the Minister. The Whips will confirm that the agreement was for each Front Bench speaker to speak for 15 minutes and I stuck strictly to that. It would be in order for the Minister now to apologise.

Mr. Fletcher: That is a rather shocking statement from the hon. Gentleman.
It would be wrong to say that there has been a chorus of protest about the Bill from Labour Members. [Interruption.] Muttering that I am a liar does not make me one. It would be wrong to suggest that there has been a chorus of protest from Labour Members because there have not been enough present to make a chorus. However, the word "irrelevant" which has echoed around the rather empty Labour Benches this evening is nothing less than a misunderstanding of the Bill or of the state of the British shipbuilding industry today. If there is one thing that the industry needs it is the opportunity to be flexible, to obtain the resources of the private sector and the opportunity for joint ventures and the other prospects that will open up to British Shipbuilders as a result of the Bill.
In opening the Third Reading debate my hon. Friend the Minister of State said that the industry was in a straightjacket. It is indeed in a legislative straightjacket which prevents the industry from having the same flexibility and business arrangements that other parts of British industry are able to undertake and participate in. That is the main reason for the Bill. If one takes a serious view of the industry today, one must agree that it needs that flexibility in order to survive. It is in a fight for survival in a world market that is experiencing one of the worst recessions in 50 years.
I regret that I do not have time to answer all the points that have been raised—[Interruption.] I understand that there is time now. One point that was raised by my hon. Friend the Member for Bristol, North-West (Mr. Colvin) related to nationalisation compensation. The European Commission of Human Rights has found that seven of the applications presented to it are procedurally in order, but that implies no view as to their merits, which are now under consideration.
There should be no doubt about the Government's case. Our argument is simply that the compensation arrangements under the 1977 Act did not involve a breach of the convention or the international law requirements. The Government are arguing no more than that the legislation did not breach the convention requirement concerning the public interest. That is not to say that the legislation cannot be criticised on wider grounds. That is the case that the Government are making clear to the commission. That is the position, whatever context may have been included in some press reports or whatever shine may have been put on it by the Opposition—

It being Ten o'clock, the debate stood adjourned.

Ordered,
That, at this day's sitting, the British Shipbuilders Bill may be proceeded with, though opposed, until any hour.—[Mr. Lang.]

Question again proposed, That the Bill be now read the Third time.

Mr. Fletcher: The Bill should be seen in the context of the industry as a whole. Over the past three years the industry has passed through a period of restructuring and reorganisation which, as many hon. Members have rightly said, has been a traumatic experience. The chairman and the work force in the industry have done a great deal, but, despite the claims of Opposition Members, including the hon. Member for Stirling, Falkirk and Grangemouth, the industry has still not reached the productivity levels that existed before nationalisation. This is a matter of regret to everyone involved. No doubt it is related to the state of the market, but it is nevertheless a fact, despite the investment which has taken place at a higher rate in recent years than previously.
The Government have given the industry a great deal of support—£600 million since we came to office. It is now facing a serious world recession and the prospects for all the merchant yards—the hon. Member for Dundee, West (Mr. Ross) mentioned the yards on the Clyde—are gloomy. The chairman recently announced redundancies.
The problems facing the industry underline the fact that it will have a much better chance of survival if it is not kept in a straitjacket in the public sector. If it is able to use the resources of the private sector and if it is able to be more flexible, it has a better chance of surviving the present difficulties. That would bring the industry alongside the shipbuilding industries of most of our European competitors. We are the only country in western Europe which has a wholly nationalised shipbuilding industry. Neither we nor the industry benefits from that.
There is a need to develop the industry's strength. The attraction of the Bill is to enable it to attract private investment. Obviously the warship building side will attract the greatest interest. These businesses should not be starved of capital or investment because of losses elsewhere in the industry. In the past, capital investment has suffered because of demands for cash to meet deficits elsewhere. The fact remains that a large part of the corporation will remain within the public sector. That was said clearly by my hon. Friend the Minister of State on Second Reading. The Government will continue to support merchant shipbuilding in this country.
The corporate plan has been considered and, in view of market difficulties, the external financing limit has been increased from £122 million in 1982–83 to £160 million in 1983–84. The corporation has a continuing duty to make progress towards providing an adequate return on the capital employed in the industry.
The shipbuilding industry has a difficult time ahead and management and work force will need to work together to gain orders. The Government will continue to support the industry's efforts and the Government will use the Bill, as and when opportunities arise, to bring in private sector partners to the industry covering all of its activities. The need for that is perfectly obvious to everyone in the country and in the House who is concerned about the future and the prospects of the shipbuilding industry. We are merely putting the industry on the same footing as its European competitors. That is one of the reasons for


bringing the legislation before the House. It is a very important reason. Accordingly, I commend the Bill to my hon. Friends.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 285, Noes 213.

Division No.79]
[10.4 pm


AYES


Aitken, Jonathan
Eggar, Tim


Alexander, Richard
Elliott, Sir William


Alison, Rt Hon Michael
Emery, Sir Peter


Amery, Rt Hon Julian
Eyre, Reginald


Ancram, Michael
Fairbairn, Nicholas


Arnold, Tom
Fairgrieve, Sir Russell


Aspinwall, Jack
Faith, Mrs Sheila


Atkins, Rt Hon H. (S'thorne)
Farr, John


Atkins, Robert (Preston N)
Fell, Sir Anthony


Atkinson, David (B'm'th,E)
Finsberg, Geoffrey


Baker, Nicholas (N Dorset)
Fisher, Sir Nigel


Banks, Robert
Fletcher, A. (Ed'nb'gh N)


Beaumont-Dark, Anthony
Fletcher-Cooke, Sir Charles


Bendall, Vivian
Fookes, Miss Janet


Bennett, Sir Frederic (T'bay)
Forman, Nigel


Benyon, Thomas (A'don)
Fowler, Rt Hon Norman


Benyon, W. (Buckingham)
Fox, Marcus


Berry, Hon Anthony
Fraser, Rt Hon Sir Hugh


Best, Keith
Fraser, Peter (South Angus)


Bevan, David Gilroy
Fry, Peter


Biffen, Rt Hon John
Gardiner, George (Reigate)


Biggs-Davison, Sir John
Gardner, Sir Edward


Blackburn, John
Garel-Jones, Tristan


Blaker, Peter
Gilmour, Rt Hon Sir Ian


Body, Richard
Goodhart, Sir Philip


Bonsor, Sir Nicholas
Goodlad, Alastair


Bottomley, Peter (W'wich W)
Gorst, John


Bowden, Andrew
Gow, Ian


Boyson, Dr Rhodes
Gower, Sir Raymond


Braine, Sir Bernard
Grant, Sir Anthony


Bright, Graham
Gray, Rt Hon Hamish


Brinton, Tim
Greenway, Harry


Brittan, Rt. Hon. Leon
Griffiths, E.(B'y St. Edm'ds)


Brooke, Hon Peter
Griffiths, Peter (Portsm'th N)


Brotherton, Michael
Grist, Ian


Brown, Michael (Brigg &amp; Sc'n)
Grylls, Michael


Browne, John (Winchester)
Gummer, John Selwyn


Bruce-Gardyne, John
Hamilton, Hon A.


Bryan, Sir Paul
Hamilton, Michael (Salisbury)


Buchanan-Smith, Rt. Hon. A.
Hannam, John


Buck, Antony
Haselhurst, Alan


Budgen, Nick
Hawkins, Sir Paul


Burden, Sir Frederick
Hawksley, Warren


Butcher, John
Hayhoe, Barney


Carlisle, John (Luton West)
Heddle, John


Carlisle, Kenneth (Lincoln)
Henderson, Barry


Carlisle, Rt Hon M. (R'c'n)
Hicks, Robert


Chalker, Mrs. Lynda
Higgins, Rt Hon Terence L.


Chapman, Sydney
Hill, James


Churchill, W. S.
Hogg, Hon Douglas (Gr'th'm)


Clark, Hon A. (Plym'th, S'n)
Holland, Philip (Carlton)


Clark, Sir W. (Croydon S)
Hooson, Tom


Clarke, Kenneth (Rushcliffe)
Hordern, Peter


Cockeram, Eric
Howe, Rt Hon Sir Geoffrey


Colvin, Michael
Howell, Rt Hon D. (G'ldf'd)


Cope, John
Howell, Ralph (N Norfolk)


Corrie, John
Hunt, David (Wirral)


Costain, Sir Albert
Hunt, John (Ravensbourne)


Cranborne, Viscount
Hurd, Rt Hon Douglas


Critchley, Julian
Irvine, Rt Hon Bryant Godman


Crouch, David
Irving, Charles (Cheltenham)


Dickens, Geoffrey
Jenkin, Rt Hon Patrick


Dorrell, Stephen
Jessel, Toby


Douglas-Hamilton, Lord J.
Jopling, Rt Hon Michael


Dover, Denshore
Joseph, Rt Hon Sir Keith


Dunn, Robert (Dartford)
Kaberry, Sir Donald


Durant, Tony
Kershaw, Sir Anthony


Dykes, Hugh
King, Rt Hon Tom


Eden, Rt Hon Sir John
Kitson, Sir Timothy


Edwards, Rt Hon N. (P'broke)
Knight, Mrs Jill





Knox, David
Ridley, Hon Nicholas


Lamont, Norman
Ridsdale, Sir Julian


Lang, Ian
Rippon, Rt Hon Geoffrey


Langford-Holt, Sir John
Roberts, Wyn (Conway)


Latham, Michael
Rossi, Hugh


Lawrence, Ivan
Rost, Peter


Lawson, Rt Hon Nigel
Royle, Sir Anthony


Lee, John
Sainsbury, Hon Timothy


Le Marchant, Spencer
St. John-Stevas, Rt Hon N.


Lennox-Boyd, Hon Mark
Shaw, Giles (Pudsey)


Lester, Jim (Beeston)
Shaw, Sir Michael (Scarb')


Lewis, Sir Kenneth (Rutland)
Shelton, William (Streatham)


Lloyd, Ian (Havant &amp; W'loo)
Shepherd, Colin (Hereford)


Lloyd, Peter (Fareham)
Shepherd, Richard


Loveridge, John
Silvester, Fred


Lyell, Nicholas
Sims, Roger


McCrindle, Robert
Skeet, T. H. H.


MacKay, John (Argyll)
Smith, Tim (Beaconsfield)


Macmillan, Rt Hon M.
Speed, Keith


McNair-Wilson, M. (N'bury)
Speller, Tony


McNair-Wilson, P. (New F'st)
Spence, John


McQuarrie, Albert
Spicer, Jim (West Dorset)


Major, John
Spicer, Michael (S Worcs)


Marland, Paul
Sproat, Iain


Marshall, Michael (Arundel)
Squire, Robin


Marten, Rt Hon Neil
Stainton, Keith


Mates, Michael
Stanbrook, Ivor


Maude, Rt Hon Sir Angus
Stanley, John


Mawby, Ray
Steen, Anthony


Mawhinney, Dr Brian
Stevens, Martin


Maxwell-Hyslop, Robin
Stewart, A. (E Renfrewshire)


Mayhew, Patrick
Stewart, Ian (Hitchin)


Mellor, David
Stokes, John


Meyer, Sir Anthony
Stradling Thomas, J.


Miller, Hal (B'grove)
Taylor, Teddy (S'end E)


Mills, Iain (Meriden)
Tebbit, Rt Hon Norman


Mills, Sir Peter (West Devon)
Temple-Morris, Peter


Miscampbell, Norman
Thatcher, Rt Hon Mrs M.


Mitchell, David (Basingstoke)
Thompson, Donald


Moate, Roger
Thorne, Neil (llford South)


Monro, Sir Hector
Thornton, Malcolm


Montgomery, Fergus
Townend, John (Bridlington)


Moore, John
Townsend, Cyril D, (B'heath)


Morgan, Geraint
Trippier, David


Morris, M. (N'hampton S)
van Straubenzee, Sir W.


Morrison, Hon C. (Devizes)
Vaughan, Dr Gerard


Mudd, David
Viggers, Peter


Murphy, Christopher
Waddington, David


Myles, David
Wakeham, John


Neale, Gerrard
Waldegrave, Hon William


Needham, Richard
Walker, B. (Perth)


Nelson, Anthony
Walker-Smith, Rt Hon Sir D.


Neubert, Michael
Wall, Sir Patrick


Newton, Tony
Waller, Gary


Nott, Rt Hon Sir John
Walters, Dennis


Onslow, Cranley
Ward, John


Osborn, John
Warren, Kenneth


Page, Richard (SW Herts)
Watson, John


Parkinson, Rt Hon Cecil
Wells, Bowen


Parris, Matthew
Wells, John (Maidstone)


Patten, Christopher (Bath)
Wheeler, John


Pawsey, James
Whitelaw, Rt Hon William


Percival, Sir Ian
Whitney, Raymond


Peyton, Rt Hon John
Wickenden, Keith


Pink, R. Bonner
Wiggin, Jerry


Pollock, Alexander
Wilkinson, John


Porter, Barry
Williams, D. (Montgomery)


Prentice, Rt Hon Reg
Winterton, Nicholas


Price, Sir David (Eastleigh)
Wolfson, Mark


Proctor, K. Harvey
Young, Sir George (Acton)


Pym, Rt Hon Francis



Rathbone, Tim
Tellers for the Ayes:


Rees-Davies, W. R.
Mr. Carol Mather and


Renton, Tim
Mr. Robert Boscawen.


Rhodes James, Robert



NOES


Abse, Leo
Alton, David


Adams, Allen
Anderson, Donald


Allaun, Frank
Archer, Rt Hon Peter






Ashley, Rt Hon Jack
Forrester, John


Atkinson, N. (H'gey,)
Foster, Derek


Barnett, Guy (Greenwich)
Foulkes, George


Barnett, Rt Hon Joel (H'wd)
Fraser, J. (Lamb'th, N'w'd)


Beith, A. J.
Freeson, Rt Hon Reginald


Benn, Rt Hon Tony
Garrett, John (Norwich S)


Bennett, Andrew (St'kp't N)
Garrett, W. E. (Wallsend)


Bidwell, Sydney
George, Bruce


Booth, Rt Hon Albert
Gilbert, Rt Hon Dr John


Boothroyd, Miss Betty
Golding, John


Bottomley, Rt Hon A. (M'b'ro)
Gourlay, Harry


Bray, Dr Jeremy
Graham, Ted


Brocklebank-Fowler, C.
Hamilton, James (Bothwell)


Brown, Hugh D. (Provan)
Hamilton, W. W. (C'tral Fife)


Brown, R. C. (N' castle W)
Hardy, Peter


Brown, Ronald W. (H'ckn'y S)
Harrison, Rt Hon Walter


Brown, Ron (E'burgh, Leith)
Hart, Rt Hon Dame Judith


Campbell, Ian
Hattersley, Rt Hon Roy


Campbell-Savours, Dale
Haynes, Frank


Canavan, Dennis
Heffer, Eric S.


Cant, R. B.
Hogg, N. (E Dunb't'nshire)


Carmichael, Neil
Holland, S. (L'b'th, Vauxh'll)


Carter-Jones, Lewis
Homewood, William


Cartwright, John
Hooley, Frank


Clark, Dr David (S Shields)
Hoyle, Douglas


Clarke, Thomas (C'b'dge, A'rie)
Hughes, Mark (Durham)


Cocks, Rt Hon M. (B'stol S)
Hughes, Robert (Aberdeen N)


Cohen, Stanley
Janner, Hon Greville


Coleman, Donald
Jay, Rt Hon Douglas


Concannon, Rt Hon J. D.
Jenkins, Rt Hon Roy (Hillh'd)


Conlan, Bernard
John, Brynmor


Cook, Robin F.
Johnson, James (Hull West)


Cowans, Harry
Jones, Barry (East Flint)


Cox, T. (W'dsw'th, Toot'g)
Jones, Dan (Burnley)


Craigen, J. M. (G'gow, M'hill)
Kaufman, Rt Hon Gerald


Crowther, Stan
Lambie, David


Cryer, Bob
Leadbitter, Ted


Cunliffe, Lawrence
Leighton, Ronald


Cunningham, Dr J. (W'h'n)
Lestor, Miss Joan


Dalyell, Tam
Lewis, Ron (Carlisle)


Davidson, Arthur
Litherland, Robert


Davies, Rt Hon Denzil (L''lli)
Lofthouse, Geoffrey


Davis, Clinton (Hackney C)
Lyon, Alexander (York)


Davis, Terry (B'ham, Stechf'd)
Lyons, Edward (Bradf'd W)


Deakins, Eric
Mabon, Rt Hon Dr J. Dickson


Dean, Joseph (Leeds West)
McCartney, Hugh


Dewar, Donald
McDonald, Dr Oonagh


Dixon, Donald
McElhone, Mrs Helen


Dobson, Frank
McGuire, Michael (Ince)


Dormand, Jack
McKelvey, William


Douglas, Dick
MacKenzie, Rt Hon Gregor


Dubs, Alfred
Maclennan, Robert


Duffy, A. E. P.
McNally, Thomas


Dunwoody, Hon Mrs G.
McNamara, Kevin


Eadie, Alex
McTaggart, Robert


Eastham, Ken
Marks, Kenneth


Edwards, R. (W'hampt'n S E)
Marshall, D (G'gow S'ton)


Ellis, R. (NE D'bysh're)
Marshall, Dr Edmund (Goole)


Ellis, Tom (Wrexham)
Marshall, Jim (Leicester S)


English, Michael
Marshall, M (G'gow S'burn)


Ennals, Rt Hon David
Mason, Rt Hon Roy


Evans, loan (Aberdare)
Maxton, John


Ewing, Harry
Meacher, Michael


Faulds, Andrew
Mikardo, Ian


Fitch, Alan
Millan, Rt Hon Bruce





Miller, Dr M. S. (E Kilbride)
Smith, Cyril (Rochdale)


Mitchell, Austin (Grimsby)
Smith, Rt Hon J. (N Lanark)


Mitchell, R. C. (Soton Itchen)
Spearing, Nigel


Morris, Rt Hon A. (W'shawe)
Spellar, John Francis (B'ham)


Morris, Rt Hon C. (O'shaw)
Spriggs, Leslie


Newens, Stanley
Stallard, A. W.


Oakes, Rt Hon Gordon
Stewart, Rt Hon D. (W Isles)


O'Halloran, Michael
Stoddart, David


O'Neill, Martin
Stott, Roger


Orme, Rt Hon Stanley
Strang, Gavin


Palmer, Arthur
Straw, Jack


Park, George
Summerskill, Hon Dr Shirley


Parker, John
Taylor, Mrs Ann (Bolton W)


Parry, Robert
Thomas, Mike (Newcastle E)


Pavitt, Laurie
Thomas, Dr R. (Carmarthen)


Penhaligon, David
Thorne, Stan (Preston South)


Pitt, William Henry
Tinn, James


Powell, Raymond (Ogmore)
Torney, Tom


Radice, Giles
Varley, Rt Hon Eric G.


Rees, Rt Hon M (Leeds S)
Wainwright, E. (Dearne V)


Richardson, Jo
Walker, Rt Hon H. (D'caster)


Roberts, Allan (Bootle)
Wardell, Gareth


Roberts, Ernest (Hackney N)
Watkins, David


Roberts, Gwilym (Cannock)
Welsh, Michael


Robertson, George
White, Frank R.


Robinson, G. (Coventry NW)
Whitlock, William


Rooker, J. W.
Willey, Rt Hon Frederick


Roper, John
Williams, Rt Hon A. (S'sea W)


Ross, Ernest (Dundee West)
Wilson, Gordon (Dundee E)


Ross, Stephen (Isle of Wight)
Wilson, Rt Hon Sir H. (H'ton)


Ryman, John
Wilson, William (C'try SE)


Sandelson, Neville
Winnick, David


Sever, John
Woodall, Alec


Sheerman, Barry
Woolmer, Kenneth


Sheldon, Rt Hon R.
Wrigglesworth, Ian


Shore, Rt Hon Peter
Wright, Sheila


Short, Mrs Renée



Silkin, Rt Hon J. (Deptford)
Tellers for the Noes:


Silkin, Rt Hon S. C. (Dulwich)
Mr. Allen McKay and


Silverman, Julius
Mr. George Morton.


Skinner, Dennis

Question accordingly agreed to.

Bill read the Third time and passed.

HOUSING AND BUILDING CONTROL [MONEY] (No. 2)

Queen's Recommendation having been signified—

Resolved,
That, for the purposes of any Act of the present Session to make further provision with respect to the rights of secure tenants in England and Wales and, in connection therewith to amend the objects of certain housing associations and housing trusts and to amend the law of England and Wales relating to the supervision of building work, the building regulations and building control, it is expedient to authorize—

(1) the payment out of money provided by Parliament of any expenses incurred by the Secretary of State in providing assistance in relation to any proceedings or prospective proceedings;

(2) the payment of any sums into the Consolidated Fund.—[Mr. Stanley.]

Orders of the Day — Families (Government Policy)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]

Mr. Keith Best: Within a short space of time recently the family has once again been in the focus of public attention on two occasions. The first was the publication of "Families in the Future" by the study commission on the family. I pay tribute to the commission's work and to the responsible way in which it has brought the problems of the family under scrutiny. I am glad that the Department of Health and Social Security and the Social Science Research Council will continue to fund this body. The second occasion was an article in The Guardian of 17 February referring to confidential Cabinet documents emanating from the family policy group set up by the Prime Minister. Its purpose was as set out in one of the alleged confidential memos of Mr. Ferdinand Mount:
We are concerned with the overall well being of the family and not solely or specifically with the provision of welfare by the state and other public agencies (which is how Family Policy is sometimes interpreted).
In that same article reference was made to the Conservative manifesto of 1979, which stated:
We want to work with the grain of human nature, helping people to help themselves—and others. This is the way to restore that self-reliance and self-confidence which are the basis of personal responsibility and national success.
It is no new idea that the family is the bulwark against the state and survives independently of it, and is therefore a bastion of freedom. Any politician who acknowledges this must be led to two conclusions. The first is that the state must not inhibit, indeed should encourage positively, family stability even though it is done at the expense of the state in terms of control, both financial and administrative.
The second conclusion is that those who fall outside the definition of the typical family, or those whose family breaks down, need succor. That can be provided in some circumstances by voluntary organisations and friends, but in a welfare state where none should fall below the safety net of adequate food, heat, shelter and health care ultimately that succour must be provided by the state. Government who fail to do so cast the first stone against the family.
If one peers through the heavy haze of hysteria that enveloped The Guardian article, we are in fact left with no more than the laudable proposition that, wherever possible, as many people as are capable should try to be more independent of the state, assume greater responsibility and, by corollary, greater freedom in the management of their own affairs. It is a Government responsibility to seek to create the correct environment in which this can occur, just as they must create a proper climate in which industry can prosper. It is refreshing to find the leadership of our party addressing its mind to these issues in the family policy group.
What we in the Conservative party must never do, however, is to forget those who are weakest in society, physically and economically: the old, the very young and those who have fallen on hard times. To do so would be to turn traitor to our traditions and the history of our party, which has contributed so much to social reform and which has moulded my political philosophy.
Let us take a lesson from the United States of America. Many ideas which are put forward here and are greeted with horror and animadversion are standard practice in the United States, which I visit regularly, and in which the individual has greater freedom than in any other society I know. Yet, as an American told me last weekend "You do not see people starving in the streets here, but you do there". The freedom of many cannot be fashioned out of the misery of the few.
The Prime Minister's initiative may lead to the formulation of an explicit family policy, which at present we do not have, although the study commission on the family urges strongly the need for a family perspective. I believe that this is right but, of course, it begs the question as to what is the family? Certain trends stand out over the past 20 years. First, there has been an increase, in fact a doubling, of one-person households, typically elderly people living alone or young people on their own, often prior to marriage. Secondly, the proportion of all families that might be regarded as typical—a married couple with dependent children—has declined from 38 per cent. in 1961 to 32 per cent. in 1980. Thirdly, the number of one-parent families with dependent children has increased; they formed only 2 per cent. of all households in the early 1960s but made up 4 per cent. by the late 1970s. Are these changes desirable or inevitable? Is there anything that the Government can do by way of a comprehensive policy to strengthen what might be regarded as a typical family?
I believe that there are certain measures that the Government can follow which seek to provide a greater stability for the family. In my speech on 17 December 1982 at c. 603 in a debate on family policy initiated by my hon. Friend the Member for Woolwich, West (Mr. Bottomley) I touched only briefly on the need to ensure that there are no fiscal disincentives to family life. Indeed, I should like to think that there were positive incentives. Unfortunately, that is not the case. As this area is not the responsibility of my hon. Friend I shall not develop it at length, but I know that he will pass my views to my right hon. and learned Friend the Chancellor. Clearly, we have to take into account the change from child tax allowances to child benefit, but families with children still suffer a heavier fiscal burden than others.
Various ideas have been canvassed in a Green Paper "The Taxation of Husband and Wife" Cmnd. 8093, published in December 1980. This emphasises the difference of approach by the Inland Revenue and the DHSS in their treatment of married persons and co-habitees. Should we treat all people as single, even though married, or treat all cohabitees as married couples for tax purposes? In paragraph 66 of the Cmnd. Paper is the proposition
In practice, therefore, the choice for the basic tax unit seems to rest between the married couple (ie continuing to aggregate husbands' and wives' incomes) and an individual.
What is unsatisfactory at present is that two Government Departments treat the same people in different ways.
No debate in this House is complete without reference to child financial support and, in particular, child benefit. Fortunately, we no longer argue about whether child benefit and its beneficial redistributive effects are good or bad. The advocates of child benefit are on both sides of this House. It is the first of what many of us hope to be many steps towards a full tax credit system. We must now concentrate the argument, however, upon its level. The Child Poverty Action Group has submitted that there


would have to be an increase of 55p in order to restore the benefit to its April 1979 level and that would cost £302 million in a full year. The value of £9 in 1955–56 fell back in the 1970s before rising to £9·30 in 1979–80. It has since fallen back to £7·60 for 1981–82. As a proportion of average earnings, the value of child support was also higher in 1979–80 than it is today. Compared, therefore, with earnings, the value of child support has not kept pace with rising living standards. When the Chancellor is considering his Budget, however, I hope that he will bear in mind one thing—that an increase in personal tax allowances, which we all expect and hope for, should be matched by a commensurate increase in child benefit, otherwise families with children will fall behind yet again.
Because benefits have fallen behind and because taxation for families has increased more than that for single people—and among two-parent families 95 per cent. have earnings as their main source of income—a wife often has to go out to work to increase the family's earnings which, of course, increases taxation that is paid. At the moment we seem to be locked into a vicious downward spiral. What is the effect upon the children who, in legal matrimonial matters, are of paramount importance?
There is no reason why spouses should not work, but there must be adequate support for children. There is no real acknowledgement of the fact that bringing up children is a full-time job in itself. One proposal from the family policy group was to encourage mothers to stay at home by at least removing fiscal discrimination against them, and that reputedly, was supported by the Chancellor. As every child can testify, and I do so strongly myself, there is nothing like a mother's love. A mother's presence is important to a child's development. Consequently, if women are to stay at home to satisfy that need to look after a family while it is growing up, thus sacrificing career prospects, either a tax credit financial allowance must be made available directly, or greater fiscal regard must be given to the financial position of the spouse. Otherwise we create family poverty.
A large proportion of Britain's children live in poor families and, at present, their numbers are growing for different reasons. Long-term unemployment means that many children will spend part of their childhood within families which, therefore, depend on supplementary benefit that is hardly generous if, indeed, it is adequate. Excluding housing costs this year, it is £69·80 for a married couple with two children aged between five and 10.
As the study commission on the family concludes
A combination of factors—unemployment, low wages and an increase in those family types most in need—means that today a large proportion of British children live either below the poverty line or near to it. The most recent figures show that 880,000 are in families with incomes of the supplementary benefit level and, altogether, there are some 2,360,000 children in families with incomes below 140 per cent. of the supplementary level.
It is small wonder, then, that I ask the Government to concentrate on what I term "families at risk". Supplementary benefit is not a proper basis of permanent income for so many families, nor was it designed as such.
It is the family that provides the great bulk of personal care for the elderly, and in that respect the family is far more important than the social services. I am glad that the

Government have acknowledged that and are now doing a great deal in encouraging care of elderly people within the family. The public perception, however, is different and my hon. Friend needs to do far more to publicise that.
I believe that there is an essential element of reciprocity in elderly people living with a family in order that they can take over some of the responsibilities of bringing up the children so as to enable the young parents to go out and enjoy themselves occasionally. In return, the elderly are cared for. I believe that we should let both young and elderly ask not what they can do for each other but what each other can do for themselves. I hope that my hon. Friend can tell me more of what we are doing to encourage people to care for the elderly within our homes. My own aunt can be fairly said to have devoted much of her life, thus denying herself certain pleasures and freedoms, to looking after my grandmother.
That necessarily means that adequate home help and nursing assistance provision must be made. If that can be done, if more can be cared for within the home, then, while I accept that there will always be a need for homes for the elderly who have no relatives to care for them or who are very confused, it will be a pleasure to see institutions close.
I hope that my hon. Friend will say something about the welcome announcement recently by my right hon. Friend the Secretary of State of £15 million being made available for intermediate treatment for children in trouble. We should not forget that many problems arise out of the concept known as the "latchkey child", whose parents are both out at work when he or she returns from school, to find an empty house and the temptation to go astray. As recently as 1921 fewer than one in 10 married women were working. Today, about half of all married women are in paid employment. Nowadays a woman can be earning as much as or more than her husband, and a woman may well enter married life with savings of her own. Yet women are still treated as subsidiary to men in taxation. Are not these ideas now outmoded?
Children can also be at risk in a family from which one parent is missing altogether—the single-parent family—some 40 per cent. of whom have supplementary benefit as their major source of funds. I should like to acknowledge the assistance given by the Government already and, of course, it is important to ensure that supplementary benefit levels do not lose their real value but are maintained in line with prices.
One cost that is particularly high is heat. I welcomed in November 1980 the increase in heating additions to their highest ever real value and more than fully price-protected. In the year from November 1982 more than £300 million will be spent on this. That is a real achievement. The old electricity discount scheme which last operated in the winter of 1978–79 helped only those with electricity. The new scheme concentrates on the poorest, including an entitlement to the lower rate of heating addition—£1·90 per week—for most supplementary benefit householders with children aged less than five. This measure will help many single-parent families. Moreover, the Government have improved the earnings disregard and there is now a day-care initiative for the under-fives which, again, will be of assistance. I repeat a plea. The Government have thought it right to provide pensioners with a £10 Christmas bonus to help them over the festive season. I believe that the single-parent families are a section of society that is equally, if not more,


deserving of such treatment. A £10 Christmas bonus for single-parent families would cost £7·3 million in a full year and would enable many children to have a happier Christmas—with presents—than they enjoy at the moment. Only today, the secretary working in my chambers told me how she has to buy the Christmas presents for the two young children of her single-parent daughter as well as provide clothing, because the daughter cannot manage on her present income.
Finally, I am sufficiently old-fashioned to believe that marriage should still be looked upon as forming the basis of the family in normal circumstances. Marriage carries many responsibilities, particularly on breakdown, which an increasing number of people feel does not result in fairness to both parties in many cases. But how many rights does marriage confer? It is time that we started giving more rights in acknowledgement of the responsibilities. When marital breakdown occurs we still need to do far more to investigate the prospects of reconciliation than is done at present and, when the break is irretrievable, we should concentrate on bringing the parties together to discuss and agree on many more aspects of financial provision and care and access for the children than there is machinery for doing within the existing structure of the courts. I welcome the publication of a consultative paper about the establishment of a family court, although many of us will never be satisfied until we ae something along the lines that was suggested in the Finer report. Nevertheless, this is a beginning. I hope, also, that we shall see the institution of a statutory conciliation service integral to the family court, since such a service has proved itself beyond measure in various places such as Brighton and Bristol.
The concept of conciliation is important because a determination reached by agreement rather than by the court's arbitration is likely to be that much longer lasting. At present an inter-departmental committee on conciliation, as set up by my right hon. and noble Friend the Lord Chancellor, is considering evidence on conciliation. I was informed recently by my right hon. and noble Friend that it was hoped that the committee would finish its work by January this year, but the volume of work involved has caused the timetable to slip by only two months, and it is now expected that the report will be delivered to Ministers in March. No decision has yet been taken on the publication of the report, but Ministers are aware of the strength of feeling on this subject and will certainly take account of it. I hope that my hon. Friend the Under-Secretary of State will pass on my strongest representation that the committee's report should be available to hon. Members, in order that we may consider fully its implications, which will lead to a proper debate about the role of conciliation within the matrimonial jurisdiction of the courts.
Ms. Jane Streather of One Parent Families has written to me expressing support for the Bristol courts' family conciliation service, which is threatened with closure unless the Government provide £40,000 for 1983–84 and guarantees funding for a further two years. She tells me that her organisation believes that a national network of conciliation services is necessary to take the bitterness out of divorce, promote the well-being of children, and save public money. Evidence demonstrates that expensive and sometimes destructive legal proceedings can be avoided by helping couples reach agreed decisions. Conciliation gives priority to children locked into parental battles over

custody, access, housing and property. It is voluntary and confidential and can lead co reconciliation. One in six of the cases dealt with by the Bristol courts' conciliation service ended in saved marriages, even though solicitors were filing divorce petitions. A conciliation service saves public money, not only in obviating the need for court welfare officer reports but in rendering unnecessary the time spent on assessing legal aid applications. The cost of the Bristol service averaged £43 per head in 1981–82 whereas legal aid costs for High Court and county court proceedings averaged £403 per head in 1980–81. In the context of this debate, one of the most important aspects of conciliation is that it allows no State interference into private affairs and gives couples control over decisions and responsibilities.
It was the Finer committee which wanted husbands and wives to be encouraged to agree through conciliation by a neutral third party rather than have a court decision imposed on them, and I hope that my right hon. and noble Friend will take on board the great strength of judicial and lay opinion in favour of such a course. In so doing he would be effecting no more than was called for by the Law Commission in its summary of recommendations on the financial consequences of divorce.
Everything possible should be done to encourage recourse to conciliation rather than litigation".
In my submission to the inter-departmental committee, I stated that between 1 March 1981 and 30 September 1981 there were 30 referrals to the Brighton in-court conciliation service which led to 17 agreements reached, of which only two subsequently broke down. In Eastbourne/Hastings, of 18 total referrals 10 agreements were reached and only two subsequently broke down. I believe that conciliation has a vital role to play in the administration of justice in matrimonial jurisdiction and will be in the best interests of the potential litigants as well as making savings in costs.
A family perspective by Government does not involve just the inevitable cry for more resources. It is something much more subtle. It requires a comprehension of the overall situation confronting families, particularly the families that are most disadvantaged, such as those that I have mentioned today. If the Government can demonstrate a commitment to that perspective and show that their measures are considered in the light of that perspective, a substantial advance will have been made in the stability of our society based upon the family unit which, after all, has endured longer than the House of Commons and longer than the oldest religion in the world.

The Under-Secretary of State for Health and Social Security (Mr. Tony Newton): If this debate were to have a subtitle, it would have to be "Perseverance Rewarded". It is perhaps within the knowledge of the Chair, as it is certainly within my knowledge, that my hon. Friend the Member for Anglesey (Mr. Best) was frustrated in an endeavour to raise this subject last month. With his usual persistence, he has returned to it today, and I am glad that he has done so. Apart from congratulating my hon. Friend on his persistence, I should also congratulate him on the number of words that he managed to pack into 15 or 16 minutes. I am not sure that I can match him in delivery or indeed in consequence to deal with all the points that he raised.
My hon. Friend was kind enough to indicate—at least, I hope that this is what he was indicating—that it would


not be right for me to comment at length on specific benefit levels and tax allowances or the structure of the tax system so close to Budget day.
I was glad that my hon. Friend acknowledged the fact that in the past two or three years the Government have taken a number of steps which reflect the importance that we attach to some of the issues that he raised. We have fulfilled our pledge to maintain the November 1980 value of child benefit. The supplementary benefit scale rates for children have been improved by 100 per cent. for the under-fives and the 11 to 12-year-olds and by 65 per cent. for other children, compared with an increase in the retail price index excluding housing of only 56 per cent. in the same period.
My hon. Friend also mentioned the relatively new policy of automatic heating additions for families with children under five. I could also add to the items that he mentioned the improvements that we have made in the family income supplement, including some improvements in eligibility directed especially towards single parents, as well as the real increase in one parent benefit and the strenuous and successful efforts that we have made to increase the take-up of that benefit.
Whatever the family is—the concept is not always so easy to define as some people assume, it is certainly far more than simply a financial unit whose interests can be seen solely in terms of the size and level of welfare benefits. More than anything else, I believe, it is an institution whose hallmark is mutual care and responsibility of people for one another, and it is on those aspects that I shall concentrate.
I was glad that my hon. Friend referred to the work of the study commission on the family and its recent report, "Families in the Future", as we certainly attach value to the work that it has done. That is why, in concert with the Social Science Research Council, the Department is funding a successor body to the study commission. We shall share the costs of the centre with the Social Science Research Council by providing a grant of up to £90,000 per year for three years, possibly to be extended. Among other tasks, it is intended to continue the valuable analysis of research and other data concerning families and public policy. We hope that it will be able to work on various suggestions that it has itself made of possible ways in which a family perspective may be maintained within Government.
In considering what the Government can, are and should be doing to strengthen, support and assist the family, we must be clear on one thing. Government help can be a relatively minor activity compared with what families can do for themselves and for each other. Indeed, the policies of the Government concerning the personal social services are based firmly on a recognition that the family is the front-line provider of social care in the United Kingdom.
Between the informal care provided by families, relations and friends and the statutory services lies the important contribution of the more formal voluntary systems of providing care. The various arms of Government provide considerable financial assistance to voluntary organisations, a large proportion of which are concerned with helping families or members of families who have problems of old age, mental handicap or growing up as responsible adults. The most recent figures

show that central Government gave a total of about £140 million in grants direct to all kinds of voluntary organisations in 1981–82. The total of my Department was £13·75 million. In the same period, social services departments in England made grants of some £22 million to voluntary organisations. A significant amount of help is going to support this kind of activity. Within those totals, much is going to organisations specifically concerned with the kind of areas on which my hon. Friend touched.
I wish to mention some of the initiatives that central Government have announced recently that in various ways will further help support and strengthen families and enable them in turn to assist and be in better contact with their members. Several of them were mentioned by my hon. Friend in his speech. I deal first with care in the community and joint finance.
One of the main anxieties that has been expressed about my Department's policy of providing care in the community has been that sufficient funds would not be available to the local authority social services and other relevant local services to provide the necessary nursing and domicilliary support to the elderly, the handicapped and disadvantaged children when they came out of the institutions which have hitherto looked after them to live with or be nearer to their families and friends.
Joint finance money is one of the main sources of such additional help and it has been possible since 1979–80 for the Government to increase the funds available from £34·5 million to an expected £96 million in 1983–84. That is a substantial increase. The 1983–84 figure includes an extra £6 million announced in July last year of which £1·5 million will be used to fund pilot projects to develop and assess the effectiveness of community care schemes. Over the next five years, we propose to make available up to £15 million for such pilot projects. We hope to extend the range of projects for which joint finance can be provided if legislation now being considered by the House is passed.
Secondly, I refer to a recent initiative involved with mental illness in old age. To help the initiative proposed by the Health Advisory Service, the Government are providing an extra £6 million over the next three years. Each regional health authority has been asked to nominate by June of this year at least one development district where the extra money would help to create suitable services more quickly than elsewhere and which would act as an example to other districts.
Thirdly, we have been making renewed efforts to get mentally handicapped children out of hospitals, which are not the right places for them to grow up. Health and local authorities have been asked to get together to review the needs of all such children in hospital and to set a date by which they expect to get each child out.
Fourthly, and this is something to which my hon. Friend referred, there is the question of the under-fives. As my right hon. Friend the Secretary of State announced on 6 December, we are setting aside £2 million a year for the next three years to encourage projects to help such families. The money is intended mainly for use in the voluntary sector to assist projects to make child-minding more effective or to promote home visiting and community self-help schemes.
One of the groups that we have especially in mind is the one-parent family group, to which my hon. Friend made several references.
Lastly, I refer to the recent initiatives concerning children in trouble. The first of those is concerned with drug abuse. The sum of £2 million is being made available in 1983–84 to encourage new ways of tackling drug misuse and to provide support for parents, who are recognised as being very important in counteracting the effects of addiction. The special funds will help to implement some of the recommendations of a report on treatment and rehabilitation of the Advisory Council on the Misuse of Drugs.
The other important initiative concerns intermediate treatment. The range of community-based facilities which has grown up over the past few years to help young people who have been in trouble with the law—which the Government want to develop more fully and which is known generally as intermediate treatment, or IT—is, we believe, of very considerable importance. Essentially, it is a way of dealing with young people in trouble that is half way between removing them from home to some residential or custodial institution, and leaving them at home under the passive supervision of a social worker or probation officer.
The sorts of programme run under the IT umbrella vary widely, but they are all designed to involve the youngster in a range of positive activities under the guidance of concerned adults. One of the main advantages of such schemes is that they keep the child within the family and the community and thus do not multiply, in some cases, the disruptive consequences of removal from home. Local authorities have increasingly recognised the value of IT. They are expected to have spent some £9 million on it last

year—20 per cent. more than the preceding year—and their expenditure is estimated to rise by a further 30 per cent. in 1982–83.
We, too, as a Government have recognised the value of IT. This year, the Government increased the grants we make available to voluntary bodies for this purpose by some 40 per cent. in real terms to well over £1 million. Recently, as my hon. Friend knows, my right hon. Friend the Secretary of State announced that there would be a further substantial increase of £15 million over three years for a special development programme. Claims for this money may be made by inter-agency voluntary organisations, whether newly established or existing, to provide IT facilities for young people.
I fear that the time remaining to me in this brief debate will not allow me to do full justice to everything that my hon. Friend has said about the law in relation to marital breakdown and the administration of the law. As my hon. Friend knows, some developments have been put forward about family courts in a consultation paper issued recently by the Lord Chancellor. I do not have time to comment as fully as I should like on what my hon. Friend has said about the importance of conciliation services. As he knows—and indeed, said—an interdepartmental commit-tee of officials is looking at these matters now, and it is, therefore, difficult for me to comment further tonight.
I have ranged widely in my speech, just as my hon. did. For that I make no apology. I am grateful to my hon. Friend for having brought such wide-ranging matters to the attention of the House.

Question put and agreed to.

Adjourned accordingly at thirteen minutes to Eleven o'clock.